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Today is shaping up negative for GeoPark Limited (NYSE:GPRK) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
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Following the downgrade, the consensus from four analysts covering GeoPark is for revenues of US$602m in 2025, implying an uncomfortable 8.9% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to decrease 8.9% to US$1.71 in the same period. Previously, the analysts had been modelling revenues of US$672m and earnings per share (EPS) of US$1.73 in 2025. Indeed we can see that the consensus opinion has undergone some fundamental changes following the recent consensus updates, with a measurable cut to revenues and some minor tweaks to earnings numbers.
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The consensus price target was reduced 6.8% to US$12.30, with the lower revenue forecasts indicating negative sentiment towards GeoPark, even though earnings forecasts were unchanged.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the GeoPark's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 8.9% by the end of 2025. This indicates a significant reduction from annual growth of 9.5% 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 3.5% annually for the foreseeable future. It's pretty clear that GeoPark's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of GeoPark's future valuation. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on GeoPark after today.