Investors in Cellnex Telecom, S.A. (BME:CLNX) had a good week, as its shares rose 7.1% to close at €51.20 following the release of its first-quarter results. It looks like the results were pretty good overall. While revenues of €358m were in line with analyst predictions, statutory losses were much smaller than expected, with Cellnex Telecom losing €0.03 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.
Taking into account the latest results, the current consensus from Cellnex Telecom's ten analysts is for revenues of €1.53b in 2020, which would reflect a sizeable 37% increase on its sales over the past 12 months. Earnings are expected to improve, with Cellnex Telecom forecast to report a statutory profit of €0.35 per share. Before this earnings report, the analysts had been forecasting revenues of €1.53b and earnings per share (EPS) of €0.29 in 2020. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice increase in earnings per share expectations following these results.
The consensus price target was unchanged at €48.60, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Cellnex Telecom, with the most bullish analyst valuing it at €59.38 and the most bearish at €28.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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 clear from the latest estimates that Cellnex Telecom's rate of growth is expected to accelerate meaningfully, with the forecast 37% revenue growth noticeably faster than its historical growth of 15%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 2.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Cellnex Telecom to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Cellnex Telecom following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at €48.60, with the latest estimates not enough to have an impact on their price targets.
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. At Simply Wall St, we have a full range of analyst estimates for Cellnex Telecom going out to 2024, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 3 warning signs for Cellnex Telecom (1 makes us a bit uncomfortable!) that you should be aware of.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.