Broker Revenue Forecasts For Frontline plc (NYSE:FRO) Are Surging Higher

Shareholders in Frontline plc (NYSE:FRO) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Frontline will make substantially more sales than they'd previously expected.

Following the latest upgrade, the six analysts covering Frontline provided consensus estimates of US$1.2b revenue in 2023, which would reflect a painful 30% decline on its sales over the past 12 months. Statutory earnings per share are supposed to shrink 2.6% to US$2.83 in the same period. Previously, the analysts had been modelling revenues of US$1.1b and earnings per share (EPS) of US$2.59 in 2023. Sentiment certainly seems to have improved in recent times, with a solid increase in revenue and a small increase to earnings per share estimates.

See our latest analysis for Frontline

Despite these upgrades, the analysts have not made any major changes to their price target of US$17.63, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. There are some variant perceptions on Frontline, with the most bullish analyst valuing it at US$22.00 and the most bearish at US$12.50 per share. 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. We would highlight that sales are expected to reverse, with a forecast 38% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 11% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 3.5% per year. So it's pretty clear that Frontline'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. They also upgraded their revenue estimates, with sales apparently performing well even though revenue growth expected to decline against the wider market this year. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Frontline.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential risks with Frontline, including dilutive stock issuance over the past year. You can learn more, and discover the 3 other risks we've identified, for free on our platform here.

We also provide an overview of the Frontline Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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.