As you might know, DTE Energy Company (NYSE:DTE) recently reported its full-year numbers. Results look mixed - while revenue fell marginally short of analyst estimates at US$13b, statutory earnings were in line with expectations, at US$6.31 per share. 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. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
After the latest results, the seven analysts covering DTE Energy are now predicting revenues of US$14.9b in 2020. If met, this would reflect a solid 18% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to accumulate 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 modest lift to revenue estimates.
Even though revenue forecasts increased, there was no change to the consensus price target of US$142, suggesting analysts are focused on earnings as the driver of value creation. 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. The most optimistic DTE Energy analyst has a price target of US$155 per share, while the most pessimistic values it at US$120. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. Analysts are definitely expecting DTE Energy's growth to accelerate, with the forecast 18% growth ranking favourably alongside historical growth of 5.8% per annum 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. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect DTE Energy to grow faster than the wider 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. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on DTE Energy. Long-term earnings power is much more important than next year's profits. 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..
You can also see whether DTE Energy is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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