What You Need To Know About The EDP - Energias de Portugal, S.A. (ELI:EDP) Analyst Downgrade Today

The analysts covering EDP - Energias de Portugal, S.A. (ELI:EDP) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the most recent consensus for EDP - Energias de Portugal from its 13 analysts is for revenues of €17b in 2024 which, if met, would be a credible 4.3% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 35% to €0.31. Prior to this update, the analysts had been forecasting revenues of €20b and earnings per share (EPS) of €0.31 in 2024. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a substantial drop in revenues and reconfirming their earnings per share estimates.

View our latest analysis for EDP - Energias de Portugal

The consensus has reconfirmed its price target of €5.27, showing that the analysts don't expect weaker sales expectationsthis year to have a material impact on EDP - Energias de Portugal's market value.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that EDP - Energias de Portugal's revenue growth is expected to slow, with the forecast 4.3% annualised growth rate until the end of 2024 being well below the historical 6.9% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 0.1% annually. Even after the forecast slowdown in growth, it seems obvious that EDP - Energias de Portugal is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of EDP - Energias de Portugal going forwards.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with EDP - Energias de Portugal's financials, such as dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other warning signs we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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