Callon Petroleum Company (NYSE:CPE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory 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 most recent consensus for Callon Petroleum from its eight analysts is for revenues of US$1.6b in 2021 which, if met, would be a solid 16% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$1.4b of revenue in 2021. It looks like there's been a clear increase in optimism around Callon Petroleum, given the solid increase in revenue forecasts.
View our latest analysis for Callon Petroleum
We'd point out that there was no major changes to their price target of US$53.02, suggesting the latest estimates were not enough to shift their view on the value of the business. 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. There are some variant perceptions on Callon Petroleum, with the most bullish analyst valuing it at US$69.00 and the most bearish at US$37.00 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Callon Petroleum's past performance and to peers in the same industry. The period to the end of 2021 brings more of the same, according to the analysts, with revenue forecast to display 35% growth on an annualised basis. That is in line with its 36% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 2.2% per year. So it's pretty clear that Callon Petroleum is forecast to grow substantially faster than its industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Callon Petroleum this year. They're also forecasting more rapid revenue growth than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Callon Petroleum.
Better yet, Callon Petroleum is expected to break-even soon - within the next few years - according to analyst forecasts, which would be a momentous event for shareholders. For more information, you can click through to our free platform to learn more about these forecasts.