VEON Ltd. (NASDAQ:VEON) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates

It's been a good week for VEON Ltd. (NASDAQ:VEON) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.0% to US$1.80. 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.

View our latest analysis for VEON

Taking into account the latest results, the current consensus from VEON's eleven analysts is for revenues of US$8.17b in 2021, which would reflect a reasonable 3.7% increase on its sales over the past 12 months. VEON is also expected to turn profitable, with statutory earnings of US$0.44 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$8.16b and earnings per share (EPS) of US$0.35 in 2021. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the great increase in earnings per share expectations following these results.

There's been no major changes to the consensus price target of US$2.24, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic VEON analyst has a price target of US$5.30 per share, while the most pessimistic values it at US$1.60. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the VEON's past performance and to peers in the same industry. One thing stands out from these estimates, which is that VEON is forecast to grow faster in the future than it has in the past, with revenues expected to display 5.0% annualised growth until the end of 2021. If achieved, this would be a much better result than the 2.4% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.3% per year. So while VEON's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around VEON's earnings potential next year. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall 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 VEON. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple VEON analysts - going out to 2024, and you can see them free on our platform here.

You can also view our analysis of VEON's balance sheet, and whether we think VEON is carrying too much debt, for free on our platform here.

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