Analysts Are Updating Their Panoro Energy ASA (OB:PEN) Estimates After Its Annual Results

Investors in Panoro Energy ASA (OB:PEN) had a good week, as its shares rose 10.0% to close at kr27.00 following the release of its full-year results. It looks like the results were a bit of a negative overall. While revenues of US$120m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.2% to hit US$0.59 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Panoro Energy

Taking into account the latest results, the most recent consensus for Panoro Energy from three analysts is for revenues of US$203.2m in 2022 which, if met, would be a substantial 70% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 89% to US$0.72. In the lead-up to this report, the analysts had been modelling revenues of US$225.2m and earnings per share (EPS) of US$0.51 in 2022. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the sizeable expansion in to the earnings per share numbers.

There's been no real change to the average price target of kr36.37, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. 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. Currently, the most bullish analyst values Panoro Energy at kr40.74 per share, while the most bearish prices it at kr33.41. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. It's clear from the latest estimates that Panoro Energy's rate of growth is expected to accelerate meaningfully, with the forecast 70% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 52% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 0.7% annually. So it's clear with the acceleration in growth, Panoro Energy is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Panoro Energy following these results. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Panoro Energy going out to 2024, and you can see them free on our platform here..

You still need to take note of risks, for example - Panoro Energy has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.