Ithaca Energy plc Just Missed Earnings - But Analysts Have Updated Their Models

Shareholders of Ithaca Energy plc (LON:ITH) will be pleased this week, given that the stock price is up 19% to UK£1.35 following its latest quarterly results. Revenues were in line with forecasts, at US$484m, although statutory earnings per share came in 16% below what the analysts expected, at US$0.042 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Ithaca Energy

Taking into account the latest results, the six analysts covering Ithaca Energy provided consensus estimates of US$1.98b revenue in 2024, which would reflect a considerable 8.2% decline over the past 12 months. Per-share earnings are expected to increase 2.7% to US$0.10. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.81b and earnings per share (EPS) of US$0.23 in 2024. So it's pretty clear the analysts have mixed opinions on Ithaca Energy after the latest results; even though they upped their revenue numbers, it came at the cost of a pretty serious reduction to per-share earnings expectations.

The consensus price target was unchanged at UK£1.62, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Ithaca Energy at UK£2.15 per share, while the most bearish prices it at UK£1.40. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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 revenue is expected to reverse, with a forecast 11% annualised decline to the end of 2024. That is a notable change from historical growth of 32% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 0.6% per year. The forecasts do look bearish for Ithaca Energy, since they're expecting it to shrink faster than the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ithaca Energy. They also upgraded their estimates, with revenue apparently performing well, although it is expected to lag the wider industry this year. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 Ithaca Energy analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Ithaca Energy , and understanding them should be part of your investment process.

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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.