Endesa, S.A. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
A week ago, Endesa, S.A. (BME:ELE) came out with a strong set of interim numbers that could potentially lead to a re-rate of the stock. Endesa beat earnings, with revenues hitting €11b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 17%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Endesa's 21 analysts are now forecasting revenues of €22.0b in 2026. This would be a reasonable 4.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to decrease 9.0% to €2.33 in the same period. Before this earnings report, the analysts had been forecasting revenues of €21.9b and earnings per share (EPS) of €2.29 in 2026. 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.
View our latest analysis for Endesa
It will come as no surprise then, to learn that the consensus price target is largely unchanged at €35.40. 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. There are some variant perceptions on Endesa, with the most bullish analyst valuing it at €44.30 and the most bearish at €27.40 per share. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Endesa's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 8.7% growth to the end of 2026 on an annualised basis. That is well above its historical decline of 2.8% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 3.8% per year. So it looks like Endesa is expected to grow faster than its competitors, at least for a while.
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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at €35.40, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Endesa. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Endesa analysts - going out to 2028, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for Endesa (1 is a bit unpleasant!) that we have uncovered.
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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.