As you might know, REN - Redes Energéticas Nacionais, SGPS, S.A. (ELI:RENE) recently reported its quarterly numbers. Results were roughly in line with estimates, with revenues of €178m and statutory earnings per share of €0.18. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from REN - Redes Energéticas Nacionais SGPS' four analysts is for revenues of €754.7m in 2020, which would reflect a credible 3.1% improvement in sales compared to the last 12 months. Statutory per share are forecast to be €0.16, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of €756.4m and earnings per share (EPS) of €0.16 in 2020. 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.
There were no changes to revenue or earnings estimates or the price target of €2.78, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic REN - Redes Energéticas Nacionais SGPS analyst has a price target of €3.20 per share, while the most pessimistic values it at €2.50. This is a very narrow spread of estimates, implying either that REN - Redes Energéticas Nacionais SGPS is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. One thing stands out from these estimates, which is that REN - Redes Energéticas Nacionais SGPS is forecast to grow faster in the future than it has in the past, with revenues expected to grow 3.1%. If achieved, this would be a much better result than the 0.7% annual decline over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 2.7% next year. So it looks like REN - Redes Energéticas Nacionais SGPS is expected to grow at about the same rate as 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. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at €2.78, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on REN - Redes Energéticas Nacionais SGPS. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for REN - Redes Energéticas Nacionais SGPS going out to 2024, and you can see them free on our platform here..
It is also worth noting that we have found 2 warning signs for REN - Redes Energéticas Nacionais SGPS that you need to take into consideration.
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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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