Bullish: Analysts Just Made A Huge Upgrade To Their Serinus Energy plc (LON:SENX) Forecasts

Shareholders in Serinus Energy plc (LON:SENX) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

Following the upgrade, the most recent consensus for Serinus Energy from its three analysts is for revenues of US$54m in 2022 which, if met, would be a major 36% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 41% to US$0.011. Prior to this update, the analysts had been forecasting revenues of US$47m and earnings per share (EPS) of US$0.0061 in 2022. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for Serinus Energy

It will come as no surprise to learn that the analysts have increased their price target for Serinus Energy 11% to UK£0.059 on the back of these upgrades. 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 Serinus Energy at UK£0.064 per share, while the most bearish prices it at UK£0.055. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Serinus Energy is an easy business to forecast or the underlying assumptions are obvious.

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 can infer from the latest estimates that forecasts expect a continuation of Serinus Energy'shistorical trends, as the 36% annualised revenue growth to the end of 2022 is roughly in line with the 32% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 2.3% per year. So although Serinus Energy is expected to maintain its revenue growth rate, it's definitely 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Serinus Energy.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential warning sign with Serinus Energy, including concerns around earnings quality. You can learn more, and discover the 1 other warning sign we've identified, for 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.