Downgrade: Here's How Analysts See Pharos Energy plc (LON:PHAR) Performing In The Near Term

One thing we could say about the analysts on Pharos Energy plc (LON:PHAR) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the latest downgrade, the four analysts covering Pharos Energy provided consensus estimates of US$115m revenue in 2025, which would reflect a chunky 9.5% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to tumble 68% to US$0.019 in the same period. Previously, the analysts had been modelling revenues of US$132m and earnings per share (EPS) of US$0.057 in 2025. Indeed, we can see that the analysts are a lot more bearish about Pharos Energy's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Pharos Energy

Analysts made no major changes to their price target of US$0.60, suggesting the downgrades are not expected to have a long-term impact on Pharos Energy's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Pharos Energy, with the most bullish analyst valuing it at US$0.76 and the most bearish at US$0.27 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Over the past five years, revenues have declined around 1.7% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 9.5% decline in revenue until the end of 2025. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 0.1% annually. So while a broad number of companies are forecast to grow, unfortunately Pharos Energy is expected to see its sales affected worse than other companies in the 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower 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 Pharos Energy.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Pharos Energy analysts - going out to 2027, and you can see them free on our platform here.

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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.