What Does The Future Hold For EnLink Midstream, LLC (NYSE:ENLC)? These Analysts Have Been Cutting Their Estimates
The analysts covering EnLink Midstream, LLC (NYSE:ENLC) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the latest downgrade, the four analysts covering EnLink Midstream provided consensus estimates of US$6.9b revenue in 2023, which would reflect an uneasy 13% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to plunge 37% to US$0.49 in the same period. Previously, the analysts had been modelling revenues of US$8.4b and earnings per share (EPS) of US$0.53 in 2023. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a minor downgrade to EPS estimates to boot.
View our latest analysis for EnLink Midstream
Despite the cuts to forecast earnings, there was no real change to the US$13.64 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 25% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 5.6% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 3.2% per year. So it's pretty clear that EnLink Midstream's revenues are expected to shrink faster than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for EnLink Midstream. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that EnLink Midstream revenue is expected to perform worse than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on EnLink Midstream after today.
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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.
