U.S. Markets close in 6 hrs 15 mins

Enel SpA (BIT:ENEL): Poised For Long Term Success?

Simply Wall St

Since Enel SpA (BIT:ENEL) released its earnings in March 2019, analysts seem cautiously bearish, as a 0.3% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 21%. Currently with trailing-twelve-month earnings of €4.8b, we can expect this to reach €4.8b by 2020. Below is a brief commentary on the longer term outlook the market has for Enel. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

View our latest analysis for Enel

What can we expect from Enel in the longer term?

Longer term expectations from the 20 analysts covering ENEL’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

BIT:ENEL Past and Future Earnings, August 1st 2019

This results in an annual growth rate of 5.1% based on the most recent earnings level of €4.8b to the final forecast of €5.4b by 2022. This leads to an EPS of €0.54 in the final year of projections relative to the current EPS of €0.47. In 2022, ENEL's profit margin will have expanded from 6.5% to 6.7%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Enel, I've compiled three fundamental aspects you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Enel worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Enel is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Enel? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Thank you for reading.