News Flash: Analysts Just Made A Notable Upgrade To Their Cabot Oil & Gas Corporation (NYSE:COG) Forecasts

Shareholders in Cabot Oil & Gas Corporation (NYSE:COG) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.

Following the upgrade, the latest consensus from Cabot Oil & Gas' nine analysts is for revenues of US$2.3b in 2021, which would reflect a substantial 52% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to soar 136% to US$1.62. Prior to this update, the analysts had been forecasting revenues of US$2.0b and earnings per share (EPS) of US$1.47 in 2021. The forecasts seem more optimistic now, with a solid increase in revenue and a modest lift to earnings per share estimates.

See our latest analysis for Cabot Oil & Gas

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Despite these upgrades, the analysts have not made any major changes to their price target of US$20.98, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Cabot Oil & Gas analyst has a price target of US$27.00 per share, while the most pessimistic values it at US$17.50. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Cabot Oil & Gas shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cabot Oil & Gas' past performance and to peers in the same industry. The analysts are definitely expecting Cabot Oil & Gas' growth to accelerate, with the forecast 75% annualised growth to the end of 2021 ranking favourably alongside historical growth of 6.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 2.5% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Cabot Oil & Gas is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Cabot Oil & Gas.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Cabot Oil & Gas going out to 2023, and you can see them free on our platform here..

You can also see our analysis of Cabot Oil & Gas' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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