Earnings Beat: CTT - Correios De Portugal, S.A. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a good week for CTT - Correios De Portugal, S.A. (ELI:CTT) shareholders, because the company has just released its latest yearly results, and the shares gained 9.5% to €3.06. Revenues were €745m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at €0.11, an impressive 31% ahead of estimates. 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.

See our latest analysis for CTT - Correios De Portugal

Following the latest results, CTT - Correios De Portugal's four analysts are now forecasting revenues of €793.6m in 2021. This would be a credible 6.5% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 56% to €0.17. Before this earnings report, the analysts had been forecasting revenues of €778.6m and earnings per share (EPS) of €0.16 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of €2.59, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. There are some variant perceptions on CTT - Correios De Portugal, with the most bullish analyst valuing it at €3.50 and the most bearish at €1.85 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that CTT - Correios De Portugal's rate of growth is expected to accelerate meaningfully, with the forecast 6.5% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 1.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that CTT - Correios De Portugal 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 CTT - Correios De Portugal'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. The consensus price target held steady at €2.59, 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 forecasts for CTT - Correios De Portugal going out to 2023, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for CTT - Correios De Portugal that you should be aware of.

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