Shareholders in Continental Resources, Inc. (NYSE:CLR) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The market seems to be pricing in some improvement in the business too, with the stock up 6.0% over the past week, closing at US$27.24. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
Following the upgrade, the current consensus from Continental Resources' 20 analysts is for revenues of US$4.8b in 2021 which - if met - would reflect a sizeable 72% increase on its sales over the past 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of US$2.23 per share this year. Previously, the analysts had been modelling revenues of US$4.0b and earnings per share (EPS) of US$1.46 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
Check out our latest analysis for Continental Resources
It will come as no surprise to learn that the analysts have increased their price target for Continental Resources 5.8% to US$29.50 on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Continental Resources at US$35.00 per share, while the most bearish prices it at US$17.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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 clear from the latest estimates that Continental Resources' rate of growth is expected to accelerate meaningfully, with the forecast 106% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 9.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Continental Resources to grow faster than the wider industry.