Energean plc (LON:ENOG) Analysts Just Slashed This Year's Estimates

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. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon. Shares are up 4.6% to UK£10.73 in the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

After the downgrade, the eight analysts covering Energean are now predicting revenues of US$2.0b in 2024. If met, this would reflect a major 43% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to soar 153% to US$2.55. Previously, the analysts had been modelling revenues of US$2.3b and earnings per share (EPS) of US$3.35 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

View our latest analysis for Energean

It'll come as no surprise then, to learn that the analysts have cut their price target 5.4% to UK£14.51.

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. It's pretty clear that there is an expectation that Energean's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 43% growth on an annualised basis. This is compared to a historical growth rate of 59% 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 revenue shrink 1.6% per year. So it's clear that despite the slowdown in growth, Energean is still expected to grow meaningfully faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Energean. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better 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 Energean.

That said, the analysts might have good reason to be negative on Energean, given the risk of cutting its dividend. For more information, you can click here to discover this and the 1 other risk we've identified.

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