Veolia Environnement S.A. Just Missed EPS By 79%: Here's What Analysts Think Will Happen Next

The annual results for Veolia Environnement S.A. (EPA:VIE) were released last week, making it a good time to revisit its performance. It looks like a pretty bad result, all things considered. Although revenues of €26b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 79% to hit €0.15 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Veolia Environnement

Taking into account the latest results, the current consensus from Veolia Environnement's nine analysts is for revenues of €27.4b in 2021, which would reflect a reasonable 5.3% increase on its sales over the past 12 months. Per-share earnings are expected to surge 174% to €1.26. Yet prior to the latest earnings, the analysts had been anticipated revenues of €27.3b and earnings per share (EPS) of €1.22 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at €24.95, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. There are some variant perceptions on Veolia Environnement, with the most bullish analyst valuing it at €30.00 and the most bearish at €18.50 per share. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Veolia Environnement's growth to accelerate, with the forecast 5.3% growth ranking favourably alongside historical growth of 2.1% 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 2.2% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Veolia Environnement is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Veolia Environnement's earnings potential next year. 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. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Veolia Environnement going out to 2024, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 5 warning signs with Veolia Environnement (at least 1 which is significant) , and understanding them should be part of your investment process.

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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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