One Nostrum Oil & Gas PLC (LON:NOG) Analyst Just Lifted Their Revenue Forecasts By A Meaningful 11%

Nostrum Oil & Gas PLC (LON:NOG) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the latest upgrade, the current consensus, from the lone analyst covering Nostrum Oil & Gas, is for revenues of US$120m in 2023, which would reflect a disturbing 40% reduction in Nostrum Oil & Gas' sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.90 per share. Yet before this consensus update, the analyst had been forecasting revenues of US$108m and losses of US$0.94 per share in 2023. We can see there's definitely been a change in sentiment in this update, with the analyst administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

View our latest analysis for Nostrum Oil & Gas

The consensus price target rose 81% to US$0.29, with the analyst encouraged by the higher revenue and lower forecast losses for this year.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Over the past five years, revenues have declined around 19% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 40% decline in revenue until the end of 2023. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to decline 2.6% annually. While this is interesting, Nostrum Oil & Gas', revenues are still expected to shrink next year, and at a faster rate than the wider industry.

The Bottom Line

The most important thing here is that the analyst reduced their loss per share estimates for this year, reflecting increased optimism around Nostrum Oil & Gas' prospects. They also upgraded their revenue estimates, with sales apparently performing well even though revenue growth expected to decline against the wider market this year. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Nostrum Oil & Gas.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 6 potential warning signs with Nostrum Oil & Gas, including major dilution from new stock issuance in the past year. For more information, you can click through to our platform to learn more about this and the 3 other warning signs we've identified .

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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