Yahoo Finance Golar LNG Limited (NASDAQ:GLNG) Just Reported Earnings, And Analysts Cut Their Target Price
Shareholders of Golar LNG Limited (NASDAQ:GLNG) will be pleased this week, given that the stock price is up 11% to US$8.38 following its latest first-quarter results. The results don't look great, especially considering that statutory losses grew 1269% toUS$1.06 per share. Revenues of US$123m did beat expectations by 6.6%, but it looks like a bit of a cold comfort. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Golar LNG after the latest results.
View our latest analysis for Golar LNG
Taking into account the latest results, the twelve analysts covering Golar LNG provided consensus estimates of US$435.7m revenue in 2020, which would reflect a discernible 4.7% decline on its sales over the past 12 months. Per-share statutory losses are expected to explode, reaching US$0.62 per share. Before this earnings report, the analysts had been forecasting revenues of US$453.5m and earnings per share (EPS) of US$0.054 in 2020. The analysts have made an abrupt about-face on Golar LNG, administering a small dip in to revenue forecasts and slashing the earnings outlook from a profit to loss.
The consensus price target fell 7.8% to US$15.77, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Golar LNG at US$25.00 per share, while the most bearish prices it at US$9.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 4.7%, a significant reduction from annual growth of 41% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Golar LNG is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts are expecting Golar LNG to become unprofitable next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Golar LNG's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Golar LNG going out to 2022, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 2 warning signs for Golar LNG that you need to be mindful of.
Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
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. Thank you for reading.
