Shelf Drilling, Ltd. (OB:SHLF) Just Reported Second-Quarter Earnings And Analysts Are Lifting Their Estimates

As you might know, Shelf Drilling, Ltd. (OB:SHLF) recently reported its second-quarter numbers. Shelf Drilling beat revenue forecasts by a solid 11%, hitting US$234m. Statutory losses also blew out, with the loss per share reaching US$0.07, some 1,983% bigger than the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Shelf Drilling

Taking into account the latest results, the twin analysts covering Shelf Drilling provided consensus estimates of US$923.0m revenue in 2024, which would reflect a measurable 6.8% decline over the past 12 months. Per-share earnings are expected to leap 131% to US$0.15. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$874.5m and earnings per share (EPS) of US$0.098 in 2024. So it seems there's been a definite increase in optimism about Shelf Drilling's future following the latest results, with a considerable lift to the earnings per share forecasts in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of kr37.69, suggesting that the forecast performance does not have a long term impact on the company's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 13% annualised decline to the end of 2024. That is a notable change from historical growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 11% annually for the foreseeable future. It's pretty clear that Shelf Drilling's revenues are expected to perform substantially worse 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 Shelf Drilling following these results. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at kr37.69, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Shelf Drilling. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Shelf Drilling going out as far as 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Shelf Drilling (1 is concerning!) 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.