DTE Energy Company (NYSE:DTE) last week reported its latest annual results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues came in 7.8% below expectations, at US$13b. Statutory earnings per share were relatively better off, with a per-share profit of US$6.31 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company’s performance, look at what top analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. With this in mind, we’ve gathered the latest statutory forecasts to see what analysts are expecting for next year.
Taking into account the latest results, the latest consensus from DTE Energy’s seven analysts is for revenues of US$14.9b in 2020, which would reflect a decent 18% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to rise 5.1% to US$6.64. Before this earnings report, analysts had been forecasting revenues of US$14.4b and earnings per share (EPS) of US$6.63 in 2020. There doesn’t appear to have been a major change in analyst sentiment following the results, other than the small lift in revenue estimates.
It may not be a surprise to see that analysts have reconfirmed their price target of US$142, implying that the uplift in sales is not expected to greatly contribute to DTE Energy’s valuation in the near term. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on DTE Energy, with the most bullish analyst valuing it at US$155 and the most bearish at US$120 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. It’s clear from the latest estimates that DTE Energy’s rate of growth is expected to accelerate meaningfully, with forecast 18% revenue growth noticeably faster than its historical growth of 5.8%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.6% per year. Factoring in the forecast acceleration in revenue, it’s pretty clear that DTE Energy is expected to grow much faster than its market.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider market. The consensus price target held steady at US$142, with the latest estimates not enough to have an impact on analysts’ estimated valuations.
Still, the long-term prospects of the business are much more relevant than next year’s earnings. At Simply Wall St, we have a full range of analyst estimates for DTE Energy going out to 2024, and you can see them free on our platform here..
It might also be worth considering whether DTE Energy’s debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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