Analysts' Revenue Estimates For Naturgy Energy Group, S.A. (BME:NTGY) Are Surging Higher

Celebrations may be in order for Naturgy Energy Group, S.A. (BME:NTGY) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. Investor sentiment seems to be improving too, with the share price up 5.8% to €28.35 over the past 7 days. Could this big upgrade push the stock even higher?

Following the latest upgrade, the current consensus, from the 13 analysts covering Naturgy Energy Group, is for revenues of €24b in 2022, which would reflect a considerable 20% reduction in Naturgy Energy Group's sales over the past 12 months. Statutory earnings per share are presumed to increase 6.5% to €1.37. Previously, the analysts had been modelling revenues of €21b and earnings per share (EPS) of €1.34 in 2022. The forecasts seem more optimistic now, with a nice gain to revenue and a small lift in earnings per share estimates.

Check out our latest analysis for Naturgy Energy Group

Of course, another way to look at these forecasts is to place them into context against the industry itself. Over the past five years, revenues have declined around 2.5% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 35% decline in revenue until the end of 2022. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue shrink 0.2% per year. So it's pretty clear that Naturgy Energy Group sales are expected to decline at a faster rate than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Notably, analysts also upgraded their revenue estimates, with sales performing well although Naturgy Energy Group's revenue growth is expected to trail that of the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Naturgy Energy Group.

Analysts are clearly in love with Naturgy Energy Group at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as the risk of cutting its dividend. For more information, you can click through to our platform to learn more about this and the 1 other concern we've identified .

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.