REN - Redes Energéticas Nacionais, SGPS, S.A. (ELI:RENE) Just Released Its First-Quarter Earnings: Here's What Analysts Think

Investors in REN - Redes Energéticas Nacionais, SGPS, S.A. (ELI:RENE) had a good week, as its shares rose 2.6% to close at €2.34 following the release of its first-quarter results. Revenues came in 4.9% below expectations, at €211m. Statutory earnings per share were relatively better off, with a per-share profit of €0.22 being roughly in line with analyst estimates. 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.

View our latest analysis for REN - Redes Energéticas Nacionais SGPS

Following last week's earnings report, REN - Redes Energéticas Nacionais SGPS' seven analysts are forecasting 2024 revenues to be €939.5m, approximately in line with the last 12 months. Statutory earnings per share are expected to nosedive 24% to €0.16 in the same period. Before this earnings report, the analysts had been forecasting revenues of €912.0m and earnings per share (EPS) of €0.16 in 2024. So it's pretty clear consensus is mixed on REN - Redes Energéticas Nacionais SGPS after the latest results; whilethe analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.

The consensus price target was unchanged at €2.66, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values REN - Redes Energéticas Nacionais SGPS at €3.45 per share, while the most bearish prices it at €2.30. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.7% by the end of 2024. This indicates a significant reduction from annual growth of 5.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.6% per year. It's pretty clear that REN - Redes Energéticas Nacionais SGPS' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for REN - Redes Energéticas Nacionais SGPS. They also upgraded their revenue estimates for next year, even though it is expected to grow slower 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 REN - Redes Energéticas Nacionais SGPS going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for REN - Redes Energéticas Nacionais SGPS you should be aware of, and 2 of them are a bit unpleasant.

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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.