In This Article:
Market forces rained on the parade of Peninsula Energy Limited (ASX:PEN) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.
Following the downgrade, the most recent consensus for Peninsula Energy from its four analysts is for revenues of US$12m in 2025 which, if met, would be a modest 2.4% increase on its sales over the past 12 months. Losses are expected to be contained, narrowing 17% per share from last year to US$0.0032 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$19m and losses of US$0.00085 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
View our latest analysis for Peninsula Energy
The consensus price target fell 6.7% to AU$0.20, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Peninsula Energy's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.4% growth on an annualised basis. This is compared to a historical growth rate of 37% 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 6.6% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Peninsula Energy.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Peninsula Energy's revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
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 Peninsula Energy going out to 2027, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.