Analysts Are More Bearish On Energean plc (LON:ENOG) Than They Used To Be

The latest analyst coverage could presage a bad day for Energean plc (LON:ENOG), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. 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.

Following the latest downgrade, the current consensus, from the six analysts covering Energean, is for revenues of US$1.5b in 2024, which would reflect a definite 11% reduction in Energean's sales over the past 12 months. Statutory earnings per share are expected to be US$1.47, roughly flat on the last 12 months. Prior to this update, the analysts had been forecasting revenues of US$2.2b and earnings per share (EPS) of US$3.17 in 2024. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Energean

Analysts made no major changes to their price target of UK£12.87, suggesting the downgrades are not expected to have a long-term impact on Energean's valuation.

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 sales are expected to reverse, with a forecast 20% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 57% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 0.5% annually for the foreseeable future. So it's pretty clear that Energean's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that Energean revenue is expected to perform worse than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Energean.

Unfortunately, the earnings downgrade - if accurate - may also place pressure on Energean's mountain of debt, which could lead to some belt tightening for shareholders. You can learn more about our debt analysis for free on our platform here.

You can also see our analysis of Energean's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.