Analysts Just Shipped A Meaningful Upgrade To Their PHX Minerals Inc. (NYSE:PHX) Estimates

PHX Minerals Inc. (NYSE:PHX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Investor sentiment seems to be improving too, with the share price up 7.2% to US$2.82 over the past 7 days. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

After the upgrade, the consensus from PHX Minerals' four analysts is for revenues of US$49m in 2023, which would reflect a concerning 28% decline in sales compared to the last year of performance. Statutory earnings per share are presumed to step up 13% to US$0.53. Prior to this update, the analysts had been forecasting revenues of US$42m and earnings per share (EPS) of US$0.39 in 2023. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for PHX Minerals

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 35% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 3.3% 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 3.6% annually for the foreseeable future. The forecasts do look bearish for PHX Minerals, since they're expecting it to shrink faster than the industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates, with sales apparently performing well even though revenue growth expected to decline against the wider market this year. The clear improvement in sentiment should be enough to get most shareholders feeling more optimistic about PHX Minerals' future.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential risks with PHX Minerals, including concerns around earnings quality. You can learn more, and discover the 2 other risks we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.