Yahoo Finance Neste Oyj Just Recorded A 20% EPS Beat: Here's What Analysts Are Forecasting Next
Neste Oyj (HEL:NESTE) just released its latest yearly results and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of €16b, some 2.1% above estimates, and statutory earnings per share (EPS) coming in at €2.33, 20% ahead of expectations. 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 analysts' statutory forecasts suggest is in store for next year.
Check out our latest analysis for Neste Oyj
Taking into account the latest results, the 15 analysts covering Neste Oyj provided consensus estimates of €14.2b revenue in 2020, which would reflect a not inconsiderable 10% decline on its sales over the past 12 months. Statutory earnings per share are forecast to plummet 20% to €1.86 in the same period. Before this earnings report, analysts had been forecasting revenues of €14.1b and earnings per share (EPS) of €1.93 in 2020. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but analysts did make a small dip in their earnings per share forecasts.
Although analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 5.5% to €38.03, suggesting the revised estimates are not indicative of a weaker long-term future for the business. 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. The most optimistic Neste Oyj analyst has a price target of €45.00 per share, while the most pessimistic values it at €28.30. 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.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 10% a significant reduction from annual growth of 7.8% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 3.0% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Neste Oyj to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Neste Oyj going out to 2023, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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