Hess Corporation (NYSE:HES) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates

Shareholders might have noticed that Hess Corporation (NYSE:HES) filed its annual result this time last week. The early response was not positive, with shares down 7.9% to US$55.90 in the past week. The business exceeded revenue expectations with sales of US$4.9b coming in 6.4% ahead of forecasts. Statutory losses were US$10.15 a share, in line with what the analysts predicted. The 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Hess

Following the latest results, Hess' eleven analysts are now forecasting revenues of US$5.40b in 2021. This would be a decent 11% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 91% to US$0.91. Before this earnings announcement, the analysts had been modelling revenues of US$4.99b and losses of US$1.68 per share in 2021. So it seems there's been a definite increase in optimism about Hess' future following the latest consensus numbers, with a very promising decrease in the loss per share forecasts in particular.

There was no major change to the consensus price target of US$66.08, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Hess, with the most bullish analyst valuing it at US$80.00 and the most bearish at US$42.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. It's clear from the latest estimates that Hess' rate of growth is expected to accelerate meaningfully, with the forecast 11% revenue growth noticeably faster than its historical growth of 2.3%p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 11% per year. Hess is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at US$66.08, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Hess going out to 2025, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 3 warning signs for Hess that you should be aware of.

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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. 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.
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