As you might know, EnLink Midstream, LLC (NYSE:ENLC) last week released its latest first-quarter, and things did not turn out so great for shareholders. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (US$1.6b) coming in 22% below what they had expected. Statutory earnings per share of US$0.03 fell 79% short. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, EnLink Midstream's five analysts are now forecasting revenues of US$7.31b in 2024. This would be a solid 8.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 62% to US$0.58. Before this earnings report, the analysts had been forecasting revenues of US$8.38b and earnings per share (EPS) of US$0.59 in 2024. Indeed we can see that the consensus opinion has undergone some fundamental changes following the latest results, with a substantial drop in revenues and some minor tweaks to earnings numbers.
The average price target was steady at US$14.83even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. 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. Currently, the most bullish analyst values EnLink Midstream at US$17.00 per share, while the most bearish prices it at US$13.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting EnLink Midstream's growth to accelerate, with the forecast 11% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that EnLink Midstream is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also downgraded EnLink Midstream's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Yet - earnings are more important to the intrinsic value of the business. 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.
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 EnLink Midstream going out to 2026, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 4 warning signs for EnLink Midstream (1 is significant) you should be aware of.
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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.