Growth Investors: Industry Analysts Just Upgraded Their GeoPark Limited (NYSE:GPRK) Revenue Forecasts By 11%

GeoPark Limited (NYSE:GPRK) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. Investors have been pretty optimistic on GeoPark too, with the stock up 14% to US$13.47 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

Following the upgrade, the current consensus from GeoPark's five analysts is for revenues of US$1.1b in 2022 which - if met - would reflect a decent 20% increase on its sales over the past 12 months. Per-share earnings are expected to surge 49% to US$4.31. Prior to this update, the analysts had been forecasting revenues of US$1.0b and earnings per share (EPS) of US$4.29 in 2022. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

View our latest analysis for GeoPark

Even though revenue forecasts increased, there was no change to the consensus price target of US$25.00, suggesting the analysts are focused on earnings as the driver of value creation. 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. There are some variant perceptions on GeoPark, with the most bullish analyst valuing it at US$39.00 and the most bearish at US$18.00 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the GeoPark's past performance and to peers in the same industry. It's clear from the latest estimates that GeoPark's rate of growth is expected to accelerate meaningfully, with the forecast 44% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 13% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 6.0% per year. It seems obvious that as part of the brighter growth outlook, GeoPark is expected to grow faster than the wider 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. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at GeoPark.

Analysts are definitely bullish on GeoPark, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including a weak balance sheet. You can learn more, and discover the 2 other flags we've identified, for free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.