The NetLink NBN Trust (SGX:CJLU) Annual Results Are Out And Analysts Have Published New Forecasts

As you might know, NetLink NBN Trust (SGX:CJLU) recently reported its yearly numbers. It looks like the results were a bit of a negative overall. While revenues of S$380m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.9% to hit S$0.023 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for NetLink NBN Trust

Following last week's earnings report, NetLink NBN Trust's eight analysts are forecasting 2023 revenues to be S$386.0m, approximately in line with the last 12 months. Per-share earnings are expected to climb 12% to S$0.026. Before this earnings report, the analysts had been forecasting revenues of S$384.7m and earnings per share (EPS) of S$0.026 in 2023. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of S$1.04, showing that the business is executing well and in line with expectations. 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 NetLink NBN Trust, with the most bullish analyst valuing it at S$1.10 and the most bearish at S$0.90 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that NetLink NBN Trust's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 1.7% growth on an annualised basis. This is compared to a historical growth rate of 3.2% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.5% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than NetLink NBN Trust.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that NetLink NBN Trust's revenues are expected to perform worse 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.

With that in mind, we wouldn't be too quick to come to a conclusion on NetLink NBN Trust. Long-term earnings power is much more important than next year's profits. We have forecasts for NetLink NBN Trust going out to 2025, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for NetLink NBN Trust that you need to be mindful of.

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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.