Broker Revenue Forecasts For Naturgy Energy Group, S.A. (BME:NTGY) Are Surging Higher

Naturgy Energy Group, S.A. (BME:NTGY) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Naturgy Energy Group will make substantially more sales than they'd previously expected.

Following the upgrade, the current consensus from Naturgy Energy Group's 14 analysts is for revenues of €20b in 2022 which - if met - would reflect a decent 8.8% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting €1.27 in per-share earnings. Before this latest update, the analysts had been forecasting revenues of €18b and earnings per share (EPS) of €1.25 in 2022. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

See our latest analysis for Naturgy Energy Group

Even though revenue forecasts increased, there was no change to the consensus price target of €22.39, suggesting the analysts are focused on earnings as the driver of value creation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Naturgy Energy Group at €28.00 per share, while the most bearish prices it at €16.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. One thing stands out from these estimates, which is that Naturgy Energy Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 8.8% annualised growth until the end of 2022. If achieved, this would be a much better result than the 7.2% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 2.8% per year. So it looks like Naturgy Energy Group is expected to grow faster than its competitors, at least for a while.

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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be 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. At Simply Wall St, we have a full range of analyst estimates for Naturgy Energy Group going out to 2024, 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.

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

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.