Revenue Beat: ENCE Energía y Celulosa, S.A. Beat Analyst Estimates By 5.8%
Investors in ENCE Energía y Celulosa, S.A. (BME:ENC) had a good week, as its shares rose 3.1% to close at €2.27 following the release of its quarterly results. Results overall were respectable, with statutory earnings of €0.04 per share roughly in line with what the analysts had forecast. Revenues of €216m came in 5.8% ahead of analyst predictions. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from ENCE Energía y Celulosa's six analysts is for revenues of €846.6m in 2027. This reflects a notable 16% improvement in revenue compared to the last 12 months. ENCE Energía y Celulosa is also expected to turn profitable, with statutory earnings of €0.13 per share. Before this earnings report, the analysts had been forecasting revenues of €868.6m and earnings per share (EPS) of €0.14 in 2027. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.
View our latest analysis for ENCE Energía y Celulosa
The consensus price target fell 5.8% to €3.05, with the weaker earnings outlook clearly leading valuation estimates. 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 €3.65 per share, while the most bearish prices it at €2.60. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that ENCE Energía y Celulosa is forecast to grow faster in the future than it has in the past, with revenues expected to display 13% annualised growth until the end of 2027. If achieved, this would be a much better result than the 4.6% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 2.6% annually. Not only are ENCE Energía y Celulosa's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded ENCE Energía y Celulosa's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 forecasts for ENCE Energía y Celulosa going out to 2028, and you can see them free on our platform here.
Even so, be aware that ENCE Energía y Celulosa is showing 2 warning signs in our investment analysis , you should know about...
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