Earnings Miss: Essential Utilities, Inc. Missed EPS By 19% And Analysts Are Revising Their Forecasts

It's shaping up to be a tough period for Essential Utilities, Inc. (NYSE:WTRG), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$434m, statutory earnings missed forecasts by 19%, coming in at just US$0.28 per share. 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.

View our latest analysis for Essential Utilities

Taking into account the latest results, the consensus forecast from Essential Utilities' six analysts is for revenues of US$2.05b in 2024. This reflects a satisfactory 5.8% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$2.05, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.15b and earnings per share (EPS) of US$2.07 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The consensus has reconfirmed its price target of US$45.22, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Essential Utilities' market value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Essential Utilities at US$60.00 per share, while the most bearish prices it at US$39.96. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Essential Utilities' revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2024 being well below the historical 17% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.9% annually. So it's pretty clear that, while Essential Utilities' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at US$45.22, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Essential Utilities going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 4 warning signs we've spotted with Essential Utilities (including 1 which can't be ignored) .

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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.