(SimplyWall) EDP – Energias de Portugal SA. (ELI:EDP): Are Analysts Bull Or Bear?

(SimplyWall) The latest earnings update EDP – Energias de Portugal SA.’s (ENXTLS:EDP) released in December 2017 signalled that the company gained from a robust tailwind, leading to a double-digit earnings growth of 15.89%. Below, I’ve laid out key numbers on how market analysts perceive EDP – Energias de Portugal’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.Check out our latest analysis for EDP – Energias de PortugalMarket analysts’ prospects for next year seems pessimistic, with earnings falling by a double-digit -27.97%. Beyond this, earnings should continue to be below today’s level, with a decline of -19.80% in 2020, eventually reaching €892.72M in 2021.

ENXTLS:EDP Future Profit Mar 9th 18
ENXTLS:EDP Future Profit Mar 9th 18

Even though it is helpful to understand the growth year by year relative to today’s level, it may be more beneficial to evaluate the rate at which the business is moving on average every year. The pro of this technique is that it ignores near term flucuations and accounts for the overarching direction of EDP – Energias de Portugal’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is -2.81%. This means, we can expect EDP – Energias de Portugal will chip away at a rate of -2.81% every year for the next couple of years.