As you might know, Enbridge Inc. (TSE:ENB) recently reported its full-year numbers. Revenues of CA$50b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CA$2.64, missing estimates by 8.6%. 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 gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
Taking into account the latest results, Enbridge's 14 analysts currently expect revenues in 2020 to be CA$49.5b, approximately in line with the last 12 months. Statutory per share are forecast to be CA$2.65, approximately in line with the last 12 months. Yet prior to the latest earnings, analysts had been forecasting revenues of CA$50.8b and earnings per share (EPS) of CA$2.69 in 2020. So it looks like analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is expected to maintain EPS.
The average price target was steady at CA$57.14 even though revenue estimates declined; likely suggesting analysts place a higher value on earnings. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Enbridge, with the most bullish analyst valuing it at CA$65.00 and the most bearish at CA$38.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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. We would highlight that sales are expected to reverse, with the forecast 1.1% revenue decline a notable change from historical growth of 9.1% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 3.3% next year. It's pretty clear that Enbridge's revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider market. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at CA$57.14, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that in mind, we wouldn't be too quick to come to a conclusion on Enbridge. 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 Enbridge going out to 2024, and you can see them free on our platform here..
It might also be worth considering whether Enbridge's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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