Analysts Are Betting On Naturgy Energy Group, S.A. (BME:NTGY) With A Big Upgrade This Week

Shareholders in Naturgy Energy Group, S.A. (BME:NTGY) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the latest upgrade, the current consensus, from the 14 analysts covering Naturgy Energy Group, is for revenues of €27b in 2023, which would reflect a disturbing 21% reduction in Naturgy Energy Group's sales over the past 12 months. Statutory earnings per share are presumed to accumulate 8.1% to €1.70. Previously, the analysts had been modelling revenues of €24b and earnings per share (EPS) of €1.60 in 2023. Sentiment certainly seems to have improved in recent times, with a solid increase in revenue and a slight bump in earnings per share estimates.

Check out our latest analysis for Naturgy Energy Group

Despite these upgrades, the analysts have not made any major changes to their price target of €23.75, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Naturgy Energy Group analyst has a price target of €29.60 per share, while the most pessimistic values it at €16.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. We would highlight that sales are expected to reverse, with a forecast 18% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 0.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.6% per year. It's pretty clear that Naturgy Energy Group's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for next year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Naturgy Energy Group.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Naturgy Energy Group analysts - going out to 2025, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.