Investors in ECA SA (EPA:ECASA) had a good week, as its shares rose 4.3% to close at €21.90 following the release of its annual results. It was an okay report, and revenues came in at €113m, approximately in line with analyst estimates leading up to the results announcement. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 ECA

After the latest results, the dual analysts covering ECA are now predicting revenues of €116.0m in 2020. If met, this would reflect a credible 3.1% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to decrease 6.7% to €0.85 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €126.8m and earnings per share (EPS) of €1.01 in 2020. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

It'll come as no surprise then, to learn thatthe analysts have cut their price target 6.6% to €28.13.

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 ECA's rate of growth is expected to accelerate meaningfully, with the forecast 3.1% revenue growth noticeably faster than its historical growth of 1.6%p.a. 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 2.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect ECA to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for ECA. They also downgraded their revenue estimates, although industry data suggests that ECA's revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of ECA's future valuation.