Earnings Update: Neoen S.A. (EPA:NEOEN) Just Reported Its Yearly Results And Analysts Are Updating Their Forecasts

Neoen S.A. (EPA:NEOEN) shareholders are probably feeling a little disappointed, since its shares fell 3.0% to €44.00 in the week after its latest full-year results. Revenues were €292m, with Neoen reporting some 7.9% below analyst expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Neoen

Taking into account the latest results, the most recent consensus for Neoen from seven analysts is for revenues of €412.9m in 2021 which, if met, would be a huge 41% increase on its sales over the past 12 months. Statutory earnings per share are predicted to jump 92% to €0.52. Before this earnings report, the analysts had been forecasting revenues of €427.5m and earnings per share (EPS) of €0.58 in 2021. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The analysts made no major changes to their price target of €39.10, suggesting the downgrades are not expected to have a long-term impact on Neoen's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Neoen analyst has a price target of €59.00 per share, while the most pessimistic values it at €29.90. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. It's clear from the latest estimates that Neoen's rate of growth is expected to accelerate meaningfully, with the forecast 41% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 25% over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Neoen to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Neoen. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at €39.10, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Neoen analysts - 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 2 warning signs for Neoen (of which 1 is a bit concerning!) you should know about.

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This article by Simply Wall St is general in nature. 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.
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