Iberdrola, S.A. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

A week ago, Iberdrola, S.A. (BME:IBE) came out with a strong set of half-yearly numbers that could potentially lead to a re-rate of the stock. Results were good overall, with revenues beating analyst predictions by 2.8% to hit €10.0b. Statutory earnings per share (EPS) came in at €0.21, some 7.4% above whatthe analysts had expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Iberdrola

Following the latest results, Iberdrola's 18 analysts are now forecasting revenues of €49.7b in 2024. This would be a meaningful 8.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to dip 8.7% to €0.91 in the same period. Before this earnings report, the analysts had been forecasting revenues of €48.9b and earnings per share (EPS) of €0.88 in 2024. So the consensus seems to have become somewhat more optimistic on Iberdrola's earnings potential following these results.

There's been no major changes to the consensus price target of €12.83, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Iberdrola analyst has a price target of €15.30 per share, while the most pessimistic values it at €9.33. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Iberdrola shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Iberdrola's growth to accelerate, with the forecast 18% annualised growth to the end of 2024 ranking favourably alongside historical growth of 10% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Iberdrola to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Iberdrola's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at €12.83, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Iberdrola going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Iberdrola has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com