Algonquin Power & Utilities Corp. (TSE:AQN) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues fell 9.4% short of expectations, at US$737m. Earnings correspondingly dipped, with Algonquin Power & Utilities reporting a statutory loss of US$0.13 per share, whereas the analysts had previously modelled a profit in this period. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Algonquin Power & Utilities

Taking into account the latest results, the most recent consensus for Algonquin Power & Utilities from six analysts is for revenues of US$3.04b in 2024. If met, it would imply a solid 15% increase on its revenue over the past 12 months. Algonquin Power & Utilities is also expected to turn profitable, with statutory earnings of US$0.54 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.95b and earnings per share (EPS) of US$0.52 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$9.33, suggesting that the forecast performance does not have a long term impact on the company's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Algonquin Power & Utilities, with the most bullish analyst valuing it at CA$10.15 and the most bearish at CA$8.51 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. The analysts are definitely expecting Algonquin Power & Utilities' growth to accelerate, with the forecast 20% annualised growth to the end of 2024 ranking favourably alongside historical growth of 14% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.2% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Algonquin Power & Utilities to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Algonquin Power & Utilities following these results. 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 CA$9.33, 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. We have forecasts for Algonquin Power & Utilities going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Algonquin Power & Utilities 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.