NOS, S.G.P.S., S.A. Just Released Its Annual Results And Analysts Are Updating Their Estimates
There's been a notable change in appetite for NOS, S.G.P.S., S.A. (ELI:NOS) shares in the week since its yearly report, with the stock down 12% to €3.90. It was an okay report, and revenues came in at €1.6b, approximately in line with analyst estimates leading up to the results announcement. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on NOS S.G.P.S after the latest results.
Check out our latest analysis for NOS S.G.P.S
Taking into account the latest results, NOS S.G.P.S's ten analysts currently expect revenues in 2020 to be €1.62b, approximately in line with the last 12 months. Statutory earnings per share are expected to swell 13% to €0.32. Before this earnings report, analysts had been forecasting revenues of €1.62b and earnings per share (EPS) of €0.34 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.
It might be a surprise to learn that the consensus price target was broadly unchanged at €5.99, with analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 NOS S.G.P.S analyst has a price target of €7.50 per share, while the most pessimistic values it at €4.92. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await NOS S.G.P.S shareholders.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the NOS S.G.P.S's past performance and to peers in the same market. It's pretty clear that analysts expect NOS S.G.P.S's revenue growth will slow down substantially, with revenues next year expected to grow 1.3%, compared to a historical growth rate of 2.9% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 2.9% per year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect NOS S.G.P.S to grow slower than the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for NOS S.G.P.S. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for NOS S.G.P.S going out to 2022, and you can see them free on our platform here..
It might also be worth considering whether NOS S.G.P.S's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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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