Avangrid, Inc. (NYSE:AGR) defied analyst predictions to release its second-quarter results, which were ahead of market expectations. It was a positive result, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 13% higher than the analysts had forecast, at US$1.9b, while EPS of US$0.44 beat analyst models by 4.8%. The 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Taking into account the latest results, Avangrid's seven analysts currently expect revenues in 2024 to be US$8.45b, approximately in line with the last 12 months. Statutory earnings per share are forecast to decline 10% to US$2.26 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$8.40b and earnings per share (EPS) of US$2.26 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$36.00. 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. There are some variant perceptions on Avangrid, with the most bullish analyst valuing it at US$45.00 and the most bearish at US$32.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Avangrid's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 3.3% annualised decline to the end of 2024. That is a notable change from historical growth of 7.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.6% annually for the foreseeable future. It's pretty clear that Avangrid's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$36.00, 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 Avangrid. 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 Avangrid going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Avangrid (1 can't be ignored!) that we have uncovered.

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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.

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