Shareholders might have noticed that Portland General Electric Company (NYSE:POR) filed its first-quarter result this time last week. The early response was not positive, with shares down 3.2% to US$46.41 in the past week. Results were roughly in line with estimates, with revenues of US$573m and statutory earnings per share of US$0.91. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, Portland General Electric’s nine analysts currently expect revenues in 2020 to be US$2.11b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be US$2.45, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$2.16b and earnings per share (EPS) of US$2.57 in 2020. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
Despite the cuts to forecast earnings, there was no real change to the US$49.55 price target, showing that the analysts don’t think the changes have a meaningful impact on its intrinsic value. 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 Portland General Electric analyst has a price target of US$64.00 per share, while the most pessimistic values it at US$43.00. 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.
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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 0.8%, a significant reduction from annual growth of 2.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.0% next year. It’s pretty clear that Portland General Electric’s revenues are expected to perform substantially worse 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$49.55, 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 Portland General Electric. Long-term earnings power is much more important than next year’s profits. At Simply Wall St, we have a full range of analyst estimates for Portland General Electric going out to 2024, and you can see them free on our platform here..
We don’t want to rain on the parade too much, but we did also find 2 warning signs for Portland General Electric (1 is concerning!) that you need to be mindful of.
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