Analyst Estimates: Here’s What Brokers Think Of ENCE Energía y Celulosa, S.A. (BME:ENC) After Its First-Quarter Report
Shareholders of ENCE Energía y Celulosa, S.A. (BME:ENC) will be pleased this week, given that the stock price is up 13% to €3.46 following its latest quarterly results. 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 ENCE Energía y Celulosa after the latest results.
View our latest analysis for ENCE Energía y Celulosa
Taking into account the latest results, the most recent consensus for ENCE Energía y Celulosa from eight analysts is for revenues of €895.8m in 2024. If met, it would imply a meaningful 13% increase on its revenue over the past 12 months. Earnings are expected to improve, with ENCE Energía y Celulosa forecast to report a statutory profit of €0.35 per share. Before this earnings report, the analysts had been forecasting revenues of €868.5m and earnings per share (EPS) of €0.19 in 2024. There’s been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a sizeable expansion in earnings per share in particular.
Despite these upgrades,the analysts have not made any major changes to their price target of €4.04, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. Currently, the most bullish analyst values ENCE Energía y Celulosa at €4.50 per share, while the most bearish prices it at €3.45. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. The analysts are definitely expecting ENCE Energía y Celulosa’s growth to accelerate, with the forecast 17% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.6% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect ENCE Energía y Celulosa to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards ENCE Energía y Celulosa following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at €4.04, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. We have estimates – from multiple ENCE Energía y Celulosa analysts – going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we’ve discovered 1 warning sign for ENCE Energía y Celulosa that you should be aware of.
Valuation is complex, but we’re helping make it simple.
Find out whether ENCE Energía y Celulosa is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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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.
