Revenue Miss: Iberdrola, S.A. Fell 13% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

It's shaping up to be a tough period for Iberdrola, S.A. (BME:IBE), which a week ago released some disappointing full-year results that could have a notable impact on how the market views the stock. It looks like a weak result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of €49b missed by 13%, and statutory earnings per share of €0.72 fell short of forecasts by 4.6%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Iberdrola

Following the latest results, Iberdrola's 17 analysts are now forecasting revenues of €53.2b in 2024. This would be a credible 7.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 6.7% to €0.78. Yet prior to the latest earnings, the analysts had been anticipated revenues of €55.0b and earnings per share (EPS) of €0.78 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The average price target was steady at €12.28even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Iberdrola at €13.80 per share, while the most bearish prices it at €9.50. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Iberdrola's revenue growth is expected to slow, with the forecast 7.9% annualised growth rate until the end of 2024 being well below the historical 11% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.5% annually. So it's pretty clear that, while Iberdrola's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at €12.28, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Iberdrola. Long-term earnings power is much more important than next year's profits. 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..

Even so, be aware that Iberdrola is showing 1 warning sign in our investment analysis , 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.