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Entergy Corporation (NYSE:ETR) shareholders are probably feeling a little disappointed, since its shares fell 7.1% to US$101 in the week after its latest quarterly results. Revenues came up short, as sales of US$2.9b were 11% below what the analysts had predicted. Profits didn't suffer quite so much, with statutory per-share earnings of US$2.59 being coming in 6.1% above what was forecast. The 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 estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Entergy's ten analysts is for revenues of US$11.0b in 2021, which would reflect a satisfactory 7.8% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to fall 18% to US$5.71 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$11.0b and earnings per share (EPS) of US$5.69 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$117. 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. Currently, the most bullish analyst values Entergy at US$132 per share, while the most bearish prices it at US$101. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Entergy is forecast to grow faster in the future than it has in the past, with revenues expected to grow 7.8%. If achieved, this would be a much better result than the 1.3% annual decline over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 3.9% next year. Not only are Entergy's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. 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.
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 Entergy going out to 2024, and you can see them free on our platform here..
You still need to take note of risks, for example - Entergy has 1 warning sign we think you should be aware of.
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. 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.
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