News Flash: 3 Analysts Think Excelerate Energy, Inc. (NYSE:EE) Earnings Are Under Threat

One thing we could say about the analysts on Excelerate Energy, Inc. (NYSE:EE) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the consensus from Excelerate Energy's three analysts is for revenues of US$1.3b in 2023, which would reflect a substantial 40% decline in sales compared to the last year of performance. Statutory earnings per share are presumed to surge 365% to US$1.11. Previously, the analysts had been modelling revenues of US$2.0b and earnings per share (EPS) of US$1.33 in 2023. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a real cut to earnings per share numbers as well.

See our latest analysis for Excelerate Energy

Analysts made no major changes to their price target of US$30.50, suggesting the downgrades are not expected to have a long-term impact on Excelerate Energy's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Excelerate Energy analyst has a price target of US$33.00 per share, while the most pessimistic values it at US$28.00. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 49% by the end of 2023. This indicates a significant reduction from annual growth of 59% over the last year. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 3.6% per year. The forecasts do look bearish for Excelerate Energy, since they're expecting it to shrink faster than the industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Excelerate Energy. 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. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Excelerate Energy after the downgrade.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Excelerate Energy 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. 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.