Analyst Forecasts Just Became More Bearish On Petronet LNG Limited (NSE:PETRONET)

Today is shaping up negative for Petronet LNG Limited (NSE:PETRONET) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the most recent consensus for Petronet LNG from its five analysts is for revenues of ₹583b in 2023 which, if met, would be a solid 19% increase on its sales over the past 12 months. Statutory earnings per share are supposed to fall 15% to ₹19.83 in the same period. Previously, the analysts had been modelling revenues of ₹654b and earnings per share (EPS) of ₹19.86 in 2023. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a substantial drop in revenues and reconfirming their earnings per share estimates.

Check out our latest analysis for Petronet LNG

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. The analysts are definitely expecting Petronet LNG's growth to accelerate, with the forecast 27% annualised growth to the end of 2023 ranking favourably alongside historical growth of 6.7% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Petronet LNG to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Petronet LNG going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Petronet LNG analysts - going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.