EnLink Midstream, LLC (NYSE:ENLC) just released its latest second-quarter report and things are not looking great. Unfortunately, EnLink Midstream delivered a serious earnings miss. Revenues of US$1.6b were 19% below expectations, and statutory earnings per share of US$0.07 missed estimates by 45%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on EnLink Midstream after the latest results.
Taking into account the latest results, the most recent consensus for EnLink Midstream from five analysts is for revenues of US$7.81b in 2024. If met, it would imply a solid 15% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 64% to US$0.53. Before this earnings report, the analysts had been forecasting revenues of US$7.88b and earnings per share (EPS) of US$0.53 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.
The analysts reconfirmed their price target of US$15.42, showing that the business is executing well and in line with expectations. 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$15.00. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that EnLink Midstream's rate of growth is expected to accelerate meaningfully, with the forecast 33% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.1% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.8% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect EnLink Midstream to grow faster 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. 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 in mind, we wouldn't be too quick to come to a conclusion on EnLink Midstream. 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 EnLink Midstream going out to 2026, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 3 warning signs for EnLink Midstream you should be aware of, and 1 of them shouldn't be ignored.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
