PJSC Tatneft (MCX:TATN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.
Following the upgrade, the latest consensus from PJSC Tatneft's ten analysts is for revenues of ₽1.1t in 2021, which would reflect a major 59% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 90% to ₽82.73. Prior to this update, the analysts had been forecasting revenues of ₽1.0t and earnings per share (EPS) of ₽77.50 in 2021. The forecasts seem more optimistic now, with a solid increase in revenue and a modest lift to earnings per share estimates.
View our latest analysis for PJSC Tatneft
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$8.77, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values PJSC Tatneft at US$923 per share, while the most bearish prices it at US$443. 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.
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. The analysts are definitely expecting PJSC Tatneft's growth to accelerate, with the forecast 59% annualised growth to the end of 2021 ranking favourably alongside historical growth of 10% 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 8.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect PJSC Tatneft to grow 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at PJSC Tatneft.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple PJSC Tatneft analysts - going out to 2025, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks 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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About MISX:TATN
PJSC Tatneft
Engages in exploration, development, and production of crude oil in Russia and internationally.
Outstanding track record with excellent balance sheet and pays a dividend.