Peninsula Energy Limited (ASX:PEN) Analysts Are Reducing Their Forecasts For This Year

The analysts covering Peninsula Energy Limited (ASX:PEN) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the four analysts covering Peninsula Energy are now predicting revenues of US$12m in 2025. If met, this would reflect a modest 2.4% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 17% per share from last year to US$0.0032 per share. However, before this estimates update, the consensus had been expecting revenues of US$19m and US$0.00085 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for Peninsula Energy

The consensus price target fell 6.7% to AU$0.20, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Peninsula Energy's revenue growth is expected to slow, with the forecast 2.4% annualised growth rate until the end of 2025 being well below the historical 37% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that Peninsula Energy is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Peninsula Energy. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Peninsula Energy's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Peninsula Energy.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Peninsula Energy analysts - going out to 2027, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.