Forecast: Analysts Think New Fortress Energy Inc.'s (NASDAQ:NFE) Business Prospects Have Improved Drastically

Celebrations may be in order for New Fortress Energy Inc. (NASDAQ:NFE) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. New Fortress Energy has also found favour with investors, with the stock up an impressive 19% to US$58.41 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

After this upgrade, New Fortress Energy's four analysts are now forecasting revenues of US$2.4b in 2022. This would be a notable 18% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 141% to US$2.43. Previously, the analysts had been modelling revenues of US$2.2b and earnings per share (EPS) of US$1.27 in 2022. 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 New Fortress Energy

With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.2% to US$60.38 per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values New Fortress Energy at US$73.00 per share, while the most bearish prices it at US$54.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 pretty clear that there is an expectation that New Fortress Energy's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 40% growth on an annualised basis. This is compared to a historical growth rate of 85% over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 5.6% per year. So it's clear that despite the slowdown in growth, New Fortress Energy is still expected to grow meaningfully faster than the wider 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. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at New Fortress Energy.

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 New Fortress Energy analysts - going out to 2024, 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.

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.