Some Analysts Just Cut Their ADNOC Gas PLC (ADX:ADNOCGAS) Estimates

The latest analyst coverage could presage a bad day for ADNOC Gas PLC (ADX:ADNOCGAS), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

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Following the downgrade, the current consensus from ADNOC Gas' ten analysts is for revenues of US$20b in 2025 which - if met - would reflect an okay 6.6% increase on its sales over the past 12 months. Statutory earnings per share are supposed to decline 12% to US$0.06 in the same period. Before this latest update, the analysts had been forecasting revenues of US$23b and earnings per share (EPS) of US$0.06 in 2025. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a substantial drop in revenues and reconfirming their earnings per share estimates.

See our latest analysis for ADNOC Gas

The consensus has reconfirmed its price target of US$1.09, showing that the analysts don't expect weaker sales expectationsthis year to have a material impact on ADNOC Gas' market value. 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. Currently, the most bullish analyst values ADNOC Gas at US$1.23 per share, while the most bearish prices it at US$0.95. This is a very narrow spread of estimates, implying either that ADNOC Gas is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that ADNOC Gas' rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 6.6% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 0.1% per year. So it's clear with the acceleration in growth, ADNOC Gas is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of ADNOC Gas going forwards.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple ADNOC Gas analysts - going out to 2027, and you can see them free on our platform here.

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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.