Analysts Have Been Trimming Their NorAm Drilling AS (OB:NORAM) Price Target After Its Latest Report

As you might know, NorAm Drilling AS (OB:NORAM) recently reported its quarterly numbers. Results were roughly in line with estimates, with revenues of US$25m and statutory earnings per share of US$0.45. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for NorAm Drilling

Taking into account the latest results, the current consensus, from the dual analysts covering NorAm Drilling, is for revenues of US$97.7m in 2024. This implies a chunky 12% reduction in NorAm Drilling's revenue over the past 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$98.9m and earnings per share (EPS) of US$0.24 in 2024. So we can see that while the consensus made no real change to its revenue estimates, it also no longer provides an earnings per share estimate. This suggests that revenues are what the market is focusing on after the latest results.

The average price target fell 11% to kr56.00, withthe analysts clearly having become less optimistic about NorAm Drilling'sprospects following its latest earnings.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 15% by the end of 2024. This indicates a significant reduction from annual growth of 10% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.4% per year. It's pretty clear that NorAm Drilling's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their revenue estimates for next year, suggesting that the business is performing in line with expectations. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

At least one of NorAm Drilling's dual analysts has provided estimates out to 2026, which can be seen for free on our platform here.

Before you take the next step you should know about the 2 warning signs for NorAm Drilling that we have uncovered.

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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.