Broker Revenue Forecasts For Nostrum Oil & Gas PLC (LON:NOG) Are Surging Higher
Nostrum Oil & Gas PLC (LON:NOG) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.
After the upgrade, the consensus from Nostrum Oil & Gas' solo analyst is for revenues of US$120m in 2023, which would reflect a substantial 40% decline in sales compared to the last year of performance. Losses are supposed to balloon 31% to US$0.90 per share. However, before this estimates update, the consensus had been expecting revenues of US$108m and US$0.94 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analyst administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.
See our latest analysis for Nostrum Oil & Gas
The consensus price target rose 81% to US$0.29, with the analyst encouraged by the higher revenue and lower forecast losses for this year.
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. One more thing stood out to us about these estimates, and it's the idea that Nostrum Oil & Gas' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 40% to the end of 2023. This tops off a historical decline of 19% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to decline 2.6% annually. So it's pretty clear that Nostrum Oil & Gas sales are expected to decline at a faster rate than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Nostrum Oil & Gas is moving incrementally towards profitability. Notably, the analyst also upgraded their revenue estimates, with sales performing well although Nostrum Oil & Gas' revenue growth is expected to trail that of the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Nostrum Oil & Gas.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 6 potential risks with Nostrum Oil & Gas, including major dilution from new stock issuance in the past year. For more information, you can click through to our platform to learn more about this and the 3 other risks we've identified .
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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.
