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Xcel Energy Inc. (NASDAQ:XEL) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues came in 2.6% below expectations, at US$12b. Statutory earnings per share were relatively better off, with a per-share profit of US$2.79 being roughly in line with analyst estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Xcel Energy after the latest results.
After the latest results, the ten analysts covering Xcel Energy are now predicting revenues of US$12.4b in 2021. If met, this would reflect a reasonable 7.4% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to increase 6.5% to US$2.98. In the lead-up to this report, the analysts had been modelling revenues of US$12.3b and earnings per share (EPS) of US$2.98 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.
There were no changes to revenue or earnings estimates or the price target of US$68.60, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Xcel Energy analyst has a price target of US$82.00 per share, while the most pessimistic values it at US$52.00. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Xcel Energy's rate of growth is expected to accelerate meaningfully, with the forecast 7.4% revenue growth noticeably faster than its historical growth of 1.0%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.6% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Xcel Energy is expected to grow much faster than its 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. The consensus price target held steady at US$68.60, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Xcel Energy analysts - going out to 2024, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Xcel Energy that 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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