Earnings Update: Engie Energia Chile S.A. (SNSE:ECL) Just Reported Its Third-Quarter Results And Analysts Are Updating Their Forecasts
Investors in Engie Energia Chile S.A. (SNSE:ECL) had a good week, as its shares rose 2.6% to close at CL$1,939 following the release of its third-quarter results. Revenues of US$499m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.07, missing estimates by 4.1%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the five analysts covering Engie Energia Chile provided consensus estimates of US$1.71b revenue in 2027, which would reflect an uncomfortable 17% decline over the past 12 months. Statutory earnings per share are forecast to shrink 3.7% to US$0.27 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.70b and earnings per share (EPS) of US$0.26 in 2027. 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.
Check out our latest analysis for Engie Energia Chile
There were no changes to revenue or earnings estimates or the price target of CL$1,986, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Engie Energia Chile, with the most bullish analyst valuing it at CL$2,173 and the most bearish at CL$1,821 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Engie Energia Chile's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 14% by the end of 2027. This indicates a significant reduction from annual growth of 4.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.0% annually for the foreseeable future. It's pretty clear that Engie Energia Chile's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at CL$1,986, 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 estimates - from multiple Engie Energia Chile analysts - going out to 2028, and you can see them free on our platform here.
You still need to take note of risks, for example - Engie Energia Chile has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about.
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