Analyst Forecasts Just Became More Bearish On EL.En. S.p.A. (BIT:ELN)
Today is shaping up negative for EL.En. S.p.A. (BIT:ELN) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
Following the latest downgrade, the current consensus, from the four analysts covering EL.En, is for revenues of €505m in 2026, which would reflect a considerable 17% reduction in EL.En's sales over the past 12 months. Per-share earnings are expected to increase 2.2% to €0.74. Previously, the analysts had been modelling revenues of €624m and earnings per share (EPS) of €0.75 in 2026. Indeed we can see that the consensus opinion has undergone some fundamental changes following the recent consensus updates, with a measurable cut to revenues and some minor tweaks to earnings numbers.
Check out our latest analysis for EL.En
the analysts have also increased their price target 6.5% to €18.78, clearly signalling that lower revenue forecasts this year are not expected to have a material impact on EL.En's valuation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One more thing stood out to us about these estimates, and it's the idea that EL.En's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 17% to the end of 2026. This tops off a historical decline of 0.7% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 4.9% annually. So while a broad number of companies are forecast to grow, unfortunately EL.En is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that EL.En's revenues are expected to grow slower than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of EL.En going forwards.
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 EL.En analysts - going out to 2028, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.