Contact Energy Limited (NZSE:CEN) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Statutory earnings per share of NZ$0.30 unfortunately missed expectations by 16%, although it was encouraging to see revenues of NZ$2.9b exceed expectations by 2.7%. 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.

Check out our latest analysis for Contact Energy  earnings-and-revenue-growth

Taking into account the latest results, the consensus forecast from Contact Energy's five analysts is for revenues of NZ$3.50b in 2025. This reflects a huge 22% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 21% to NZ$0.36. Before this earnings report, the analysts had been forecasting revenues of NZ$3.39b and earnings per share (EPS) of NZ$0.38 in 2025. So it's pretty clear consensus is mixed on Contact Energy after the latest results; whilethe analysts lifted revenue numbers, they also administered a minor downgrade to per-share earnings expectations.

The consensus price target was unchanged at NZ$10.16, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. 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 Contact Energy at NZ$11.20 per share, while the most bearish prices it at NZ$8.70. This is a very narrow spread of estimates, implying either that Contact Energy is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Contact Energy's rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 2.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 0.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Contact Energy is expected to grow much faster than its industry.



The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Contact Energy. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at NZ$10.16, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Contact Energy going out to 2027, and you can see them free on our platform here..

Even so, be aware that  Contact Energy is showing  1 warning sign in our investment analysis, you should know about...

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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.