Terna S.p.A. (BIT:TRN) Just Reported Half-Yearly Earnings: Have Analysts Changed Their Mind On The Stock?

Terna S.p.A. (BIT:TRN) shareholders are probably feeling a little disappointed, since its shares fell 2.7% to €7.52 in the week after its latest half-year results. It was an okay report, and revenues came in at €1.8b, approximately in line with analyst estimates leading up to the results announcement. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Terna

After the latest results, the 15 analysts covering Terna are now predicting revenues of €3.54b in 2024. If met, this would reflect an okay 3.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to shrink 2.5% to €0.49 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €3.54b and earnings per share (EPS) of €0.49 in 2024. 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at €8.20. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Terna analyst has a price target of €9.40 per share, while the most pessimistic values it at €7.30. This is a very narrow spread of estimates, implying either that Terna is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 6.6% growth on an annualised basis. That is in line with its 8.1% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 1.8% annually. So although Terna 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Terna going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Terna (1 shouldn't be ignored!) that you need to take into consideration.

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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