GeoPark Limited Just Reported Yearly Earnings: Have Analysts Changed Their Mind On The Stock?

It's been a good week for GeoPark Limited (NYSE:GPRK) shareholders, because the company has just released its latest yearly results, and the shares gained 2.2% to US$17.02. It was an okay result overall, with revenues coming in at US$629m, roughly what analysts had been expecting. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.

See our latest analysis for GeoPark

Taking into account the latest results, the most recent consensus for GeoPark from five analysts is for revenues of US$658.7m in 2020, which is an okay 4.7% increase on its sales over the past 12 months. Statutory earnings per share are expected to jump 113% to US$2.07. Before this earnings report, analysts had been forecasting revenues of US$734.9m and earnings per share (EPS) of US$2.09 in 2020. Indeed we can see that the consensus opinion has undergone some fundamental changes following the latest results, with a real cut to to revenues and some minor tweaks to earnings numbers.

The average price target was steady at US$25.00 even though revenue estimates declined; likely suggesting analysts place a higher value on earnings. 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. The most optimistic GeoPark analyst has a price target of US$31.00 per share, while the most pessimistic values it at US$18.64. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

It can also be useful to step back and take a broader view of how analyst forecasts compare to GeoPark's performance in recent years. We would highlight that GeoPark's revenue growth is expected to slow, with forecast 4.7% increase next year well below the historical 21%p.a. growth over the last five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.6% next year. So it's pretty clear that, while GeoPark's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Analysts also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Still, earnings are more important to the long-term value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for GeoPark going out to 2023, and you can see them free on our platform here.

It might also be worth considering whether GeoPark's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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