As you might know, Atlantica Yield plc (NASDAQ:AY) last week released its latest quarterly, and things did not turn out so great for shareholders. It definitely looks like a negative result overall with revenues falling 11% short of analyst estimates at US$210m. Statutory losses were US$0.40 per share, 264% bigger than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 consensus forecast from Atlantica Yield's dual analysts is for revenues of US$1.11b in 2020, which would reflect a modest 7.4% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to surge 391% to US$1.48. Before this earnings report, the analysts had been forecasting revenues of US$1.11b and earnings per share (EPS) of US$1.26 in 2020. Although the revenue estimates have not really changed, we can see there's been a nice increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The consensus price target was unchanged at US$29.00, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Atlantica Yield's past performance and to peers in the same industry. We would highlight that Atlantica Yield's revenue growth is expected to slow, with forecast 7.4% increase next year well below the historical 11%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.3% next year. Even after the forecast slowdown in growth, it seems obvious that Atlantica Yield is also expected 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 Atlantica Yield following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.
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. We have analyst estimates for Atlantica Yield going out as far as 2023, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with Atlantica Yield (including 1 which is potentially serious) .
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.