Newsflash: Laredo Petroleum, Inc. (NYSE:LPI) Analysts Have Been Trimming Their Revenue Forecasts

Market forces rained on the parade of Laredo Petroleum, Inc. (NYSE:LPI) shareholders today, when the analysts downgraded their forecasts for next year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the current consensus, from the five analysts covering Laredo Petroleum, is for revenues of US$1.3b in 2023, which would reflect a painful 34% reduction in Laredo Petroleum's sales over the past 12 months. Before the latest update, the analysts were foreseeing US$1.5b of revenue in 2023. The consensus view seems to have become more pessimistic on Laredo Petroleum, noting the measurable cut to revenue estimates in this update.

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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. We would highlight that sales are expected to reverse, with a forecast 28% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 6.5% annually for the foreseeable future. The forecasts do look bearish for Laredo Petroleum, since they're expecting it to shrink faster than the industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Laredo Petroleum next year. They're also forecasting for revenues to shrink at a quicker rate than companies in the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Laredo Petroleum going forwards.

There might be good reason for analyst bearishness towards Laredo Petroleum, like concerns around earnings quality. For more information, you can click here to discover this and the 2 other warning signs we've identified.

You can also see our analysis of Laredo Petroleum's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.