ENAV S.p.A. (BIT:ENAV) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was an okay result overall, with revenues coming in at €172m, roughly what the analysts had been expecting. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, ENAV's five analysts are now forecasting revenues of €878.5m in 2020. This would be a satisfactory 2.1% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to reduce 8.6% to €0.20 in the same period. Before this earnings report, the analysts had been forecasting revenues of €900.5m and earnings per share (EPS) of €0.20 in 2020. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
It will come as no surprise then, that the consensus price target fell 6.7% to €4.86 following these changes. 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. There are some variant perceptions on ENAV, with the most bullish analyst valuing it at €6.10 and the most bearish at €3.94 per share. 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.
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. The analysts are definitely expecting ENAV's growth to accelerate, with the forecast 2.1% growth ranking favourably alongside historical growth of 1.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 1.6% next year. It seems obvious that as part of the brighter growth outlook, ENAV is expected to grow faster than the wider industry.
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. Unfortunately, they also downgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Yet - earnings are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 ENAV going out to 2022, and you can see them free on our platform here..
It is also worth noting that we have found 2 warning signs for ENAV (1 is potentially serious!) that you need to take into consideration.
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