Engie SA Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Investors in Engie SA (EPA:ENGI) had a good week, as its shares rose 2.7% to close at €14.88 following the release of its half-yearly results. Revenues were €16b, 10% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of €0.87 being in line with what the analysts forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Engie after the latest results.

Check out our latest analysis for Engie

Taking into account the latest results, the consensus forecast from Engie's 14 analysts is for revenues of €82.9b in 2024. This reflects a meaningful 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to decrease 5.9% to €1.91 in the same period. Before this earnings report, the analysts had been forecasting revenues of €79.4b and earnings per share (EPS) of €1.83 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of €18.36, suggesting that the forecast performance does not have a long term impact on the company's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Engie analyst has a price target of €22.80 per share, while the most pessimistic values 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Engie's growth to accelerate, with the forecast 29% annualised growth to the end of 2024 ranking favourably alongside historical growth of 12% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Engie to grow faster 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 Engie following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster 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 Engie. 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 Engie going out to 2026, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Engie (1 is significant) you should be aware of.

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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.

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