Earnings Report: Snam S.p.A. Missed Revenue Estimates By 9.5%

Snam S.p.A. (BIT:SRG) shareholders are probably feeling a little disappointed, since its shares fell 3.5% to €4.64 in the week after its latest annual results. Results look mixed - while revenue fell marginally short of analyst estimates at €3.6b, statutory earnings were in line with expectations, at €0.37 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the 17 analysts covering Snam are now predicting revenues of €3.89b in 2025. If met, this would reflect a decent 9.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 6.4% to €0.40. Before this earnings report, the analysts had been forecasting revenues of €4.00b and earnings per share (EPS) of €0.40 in 2025. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

See our latest analysis for Snam

The consensus has reconfirmed its price target of €5.18, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Snam's market value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Snam analyst has a price target of €5.90 per share, while the most pessimistic values it at €4.20. 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.

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. We can infer from the latest estimates that forecasts expect a continuation of Snam'shistorical trends, as the 9.0% annualised revenue growth to the end of 2025 is roughly in line with the 9.8% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 3.7% per year. So although Snam is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, long term profitability is more important for the value creation process. The consensus price target held steady at €5.18, 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 Snam analysts - going out to 2027, 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 2 warning signs with Snam (at least 1 which makes us a bit uncomfortable) , and understanding them should be part of your investment process.

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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.