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Shareholders might have noticed that Valaris Limited (NYSE:VAL) filed its third-quarter result this time last week. The early response was not positive, with shares down 4.8% to US$48.43 in the past week. It was not a great result overall. Although revenues beat expectations, hitting US$643m, statutory earnings missed analyst forecasts by 15%, coming in at just US$0.88 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Valaris
Taking into account the latest results, the current consensus from Valaris' ten analysts is for revenues of US$2.64b in 2025. This would reflect a solid 17% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to tumble 46% to US$7.99 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$2.67b and earnings per share (EPS) of US$8.22 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
The average price target fell 5.9% to US$83.20, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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. There are some variant perceptions on Valaris, with the most bullish analyst valuing it at US$100.00 and the most bearish at US$61.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Valaris shareholders.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Valaris' growth to accelerate, with the forecast 13% annualised growth to the end of 2025 ranking favourably alongside historical growth of 2.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.5% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Valaris to grow faster than the wider industry.