Analysts Just Made A Major Revision To Their Endesa, S.A. (BME:ELE) Revenue Forecasts

The latest analyst coverage could presage a bad day for Endesa, S.A. (BME:ELE), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the current consensus from Endesa's 17 analysts is for revenues of €25b in 2025 which - if met - would reflect a solid 18% increase on its sales over the past 12 months. Statutory earnings per share are presumed to increase 4.5% to €1.86. Prior to this update, the analysts had been forecasting revenues of €28b and earnings per share (EPS) of €1.86 in 2025. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a measurable cut to revenues and reconfirming their earnings per share estimates.

See our latest analysis for Endesa

The consensus has reconfirmed its price target of €23.39, showing that the analysts don't expect weaker sales expectationsthis year to have a material impact on Endesa's market value.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Endesa's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 7.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Endesa to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Endesa going forwards.

A high debt burden combined with a downgrade of this magnitude always gives us some reason for concern, especially if these forecasts are just the first sign of a business downturn. See why we're concerned about Endesa's balance sheet by visiting our risks dashboard for free on our platform here.

You can also see our analysis of Endesa's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.