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As you might know, Perenti Limited (ASX:PRN) recently reported its annual numbers. Statutory earnings per share fell badly short of expectations, coming in at AU$0.10, some 41% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at AU$3.3b. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Perenti
Following the latest results, Perenti's seven analysts are now forecasting revenues of AU$3.49b in 2025. This would be an okay 4.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 66% to AU$0.17. Before this earnings report, the analysts had been forecasting revenues of AU$3.56b and earnings per share (EPS) of AU$0.19 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
The average price target fell 6.0% to AU$1.36, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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. Currently, the most bullish analyst values Perenti at AU$1.88 per share, while the most bearish prices it at AU$1.10. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Perenti's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.3% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 1.8% annually. Even after the forecast slowdown in growth, it seems obvious that Perenti is also expected to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Perenti. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.