What You Need To Know About The Qatar Gas Transport Company Limited (Nakilat) (QPSC) (DSM:QGTS) Analyst Downgrade Today

One thing we could say about the analysts on Qatar Gas Transport Company Limited (Nakilat) (QPSC) (DSM:QGTS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the current consensus, from the five analysts covering Qatar Gas Transport Company Limited (Nakilat) (QPSC), is for revenues of ر.ق3.2b in 2023, which would reflect an uncomfortable 12% reduction in Qatar Gas Transport Company Limited (Nakilat) (QPSC)'s sales over the past 12 months. Statutory earnings per share are presumed to accumulate 8.3% to ر.ق0.29. Before this latest update, the analysts had been forecasting revenues of ر.ق3.6b and earnings per share (EPS) of ر.ق0.28 in 2023. Indeed we can see that the consensus opinion has undergone some fundamental changes after the recent consensus updates, with a substantial drop in revenues at the same time as boosting EPS forecasts.

View our latest analysis for Qatar Gas Transport Company Limited (Nakilat) (QPSC)

The consensus has made no major changes to the price target of ر.ق4.61, suggesting the forecast improvement in earnings is expected to offset the decline in revenues this year. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Qatar Gas Transport Company Limited (Nakilat) (QPSC) analyst has a price target of ر.ق5.50 per share, while the most pessimistic values it at ر.ق4.10. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 22% by the end of 2023. This indicates a significant reduction from annual growth of 3.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 5.2% annually for the foreseeable future. So it's pretty clear that Qatar Gas Transport Company Limited (Nakilat) (QPSC)'s revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Unfortunately they also cut their revenue estimates for this year, and they expect sales to lag the wider market. That said, earnings per share are more important for creating value for shareholders. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Qatar Gas Transport Company Limited (Nakilat) (QPSC) going forwards.

Unfortunately, by using these new estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Qatar Gas Transport Company Limited (Nakilat) (QPSC) that suggests the company could be somewhat overvalued. Find out why, and see how we estimate the valuation for 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.