Need To Know: Analysts Are Much More Bullish On PJSC LUKOIL (MCX:LKOH)

Shareholders in PJSC LUKOIL (MCX:LKOH) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investor sentiment seems to be improving too, with the share price up 4.1% to ₽6,455 over the past 7 days. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the latest consensus from PJSC LUKOIL's eleven analysts is for revenues of ₽7.3t in 2021, which would reflect a major 32% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 2,978% to ₽718. Prior to this update, the analysts had been forecasting revenues of ₽6.6t and earnings per share (EPS) of ₽530 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for PJSC LUKOIL

It will come as no surprise to learn that the analysts have increased their price target for PJSC LUKOIL 5.7% to US$90.45 on the back of these upgrades. 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. There are some variant perceptions on PJSC LUKOIL, with the most bullish analyst valuing it at US$8,356 and the most bearish at US$3,592 per share. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be possible to derive much meaning from 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. The analysts are definitely expecting PJSC LUKOIL's growth to accelerate, with the forecast 32% annualised growth to the end of 2021 ranking favourably alongside historical growth of 6.5% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that PJSC LUKOIL is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, PJSC LUKOIL could be worth investigating further.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple PJSC LUKOIL 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. 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.
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