Equitrans Midstream Corporation Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
The first-quarter results for Equitrans Midstream Corporation (NYSE:ETRN) were released last week, making it a good time to revisit its performance. It looks like a pretty bad result, all things considered. Although revenues of US$380m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 36% to hit US$0.13 per share. 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.
View our latest analysis for Equitrans Midstream
Taking into account the latest results, the consensus forecast from Equitrans Midstream's seven analysts is for revenues of US$1.51b in 2021, which would reflect a credible 5.2% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to dip 5.7% to US$0.85 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.45b and earnings per share (EPS) of US$0.90 in 2021. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a credible to revenue, the consensus also made a minor downgrade to its earnings per share forecasts.
There's been no major changes to the price target of US$10.17, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Equitrans Midstream at US$15.00 per share, while the most bearish prices it at US$6.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Equitrans Midstream'shistorical trends, as the 7.0% annualised revenue growth to the end of 2021 is roughly in line with the 7.5% annual revenue growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.2% annually. So it's pretty clear that Equitrans Midstream is forecast to grow substantially faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Equitrans Midstream. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$10.17, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Equitrans Midstream going out to 2025, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Equitrans Midstream (at least 2 which are a bit unpleasant) , and understanding these should be part of your investment process.
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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