Shareholders might have noticed that ENGIE SA (EPA:ENGI) filed its annual result this time last week. The early response was not positive, with shares down 6.7% to €11.82 in the past week. The results don't look great, especially considering that the analysts had been forecasting a profit and ENGIE delivered a statutory loss of €0.71 per share. Revenues of €56b did beat expectations by 2.5% though. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from ENGIE's 13 analysts is for revenues of €59.9b in 2021, which would reflect an okay 7.5% improvement in sales compared to the last 12 months. ENGIE is also expected to turn profitable, with statutory earnings of €1.00 per share. In the lead-up to this report, the analysts had been modelling revenues of €59.4b and earnings per share (EPS) of €1.02 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of €15.18, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic ENGIE analyst has a price target of €17.00 per share, while the most pessimistic values it at €10.20. 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that ENGIE is forecast to grow faster in the future than it has in the past, with revenues expected to display 7.5% annualised growth until the end of 2021. If achieved, this would be a much better result than the 3.6% 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 2.2% per year. So it looks like ENGIE 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 the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at €15.18, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for ENGIE going out to 2025, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for ENGIE you should know about.
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