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Energean plc Just Reported A Surprise Profit And Analysts Updated Their Estimates

It's been a pretty great week for Energean plc (LON:ENOG) shareholders, with its shares surging 13% to UK£14.54 in the week since its latest half-year results. Energean beat expectations by 6.9% with revenues of US$339m. It also surprised on the earnings front, with an unexpected statutory profit of US$0.70 per share a nice improvement on the losses that the analysts forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Energean

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the consensus forecast from Energean's eight analysts is for revenues of US$1.12b in 2022, which would reflect a huge 77% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to jump 249% to US$1.14. In the lead-up to this report, the analysts had been modelling revenues of US$1.09b and earnings per share (EPS) of US$1.08 in 2022. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

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With these upgrades, we're not surprised to see that the analysts have lifted their price target 7.6% to UK£16.95per share. 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 Energean analyst has a price target of UK£26.00 per share, while the most pessimistic values it at UK£11.07. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Energean's growth to accelerate, with the forecast 214% annualised growth to the end of 2022 ranking favourably alongside historical growth of 87% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 7.1% annually. So it's clear with the acceleration in growth, Energean is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Energean's earnings potential next year. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Energean analysts - going out to 2024, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Energean (2 are concerning!) that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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