New Forecasts: Here's What Analysts Think The Future Holds For Perenti Global Limited (ASX:PRN)

Perenti Global Limited (ASX:PRN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the most recent consensus for Perenti Global from its four analysts is for revenues of AU$2.4b in 2022 which, if met, would be a reasonable 7.8% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 42% to AU$0.07. Previously, the analysts had been modelling revenues of AU$2.1b and earnings per share (EPS) of AU$0.062 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Perenti Global

Despite these upgrades, the analysts have not made any major changes to their price target of AU$1.05, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Perenti Global analyst has a price target of AU$1.20 per share, while the most pessimistic values it at AU$1.00. Still, with such a tight range of estimates, it suggests the 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. We would highlight that Perenti Global's revenue growth is expected to slow, with the forecast 16% annualised growth rate until the end of 2022 being well below the historical 24% p.a. growth over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 0.2% per year. Factoring in the forecast slowdown in growth, it's pretty clear that Perenti Global is still expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Perenti Global could be a good candidate for more research.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Perenti Global analysts - going out to 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.