The NRJ Group SA (EPA:NRG) Half-Yearly Results Are Out And Analysts Have Published New Forecasts

As you might know, NRJ Group SA (EPA:NRG) recently reported its half-yearly numbers. Results overall were respectable, with statutory earnings of €0.52 per share roughly in line with what the analysts had forecast. Revenues of €164m came in 3.2% ahead of analyst predictions. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for NRJ Group

Following last week's earnings report, NRJ Group's dual analysts are forecasting 2021 revenues to be €357.3m, approximately in line with the last 12 months. Statutory earnings per share are predicted to swell 12% to €0.27. In the lead-up to this report, the analysts had been modelling revenues of €349.7m and earnings per share (EPS) of €0.20 in 2021. So it seems there's been a definite increase in optimism about NRJ Group's future following the latest results, with a great increase in the earnings per share forecasts in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of €8.20, suggesting that the forecast performance does not have a long term impact on the company's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the NRJ Group's past performance and to peers in the same industry. We would also point out that the forecast 2.0% annualised revenue decline to the end of 2021 is roughly in line with the historical trend, which saw revenues shrink 1.7% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.8% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect NRJ Group to suffer worse than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards NRJ Group following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on NRJ Group. Long-term earnings power is much more important than next year's profits. We have analyst estimates for NRJ Group going out as far as 2023, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for NRJ Group that you should be aware of.

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