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Canacol Energy Ltd (TSE:CNE) shareholders are probably feeling a little disappointed, since its shares fell 2.2% to CA$3.56 in the week after its latest full-year results. Revenues came in well ahead of expectations at US$279m, although statutory earnings per share fell badly short. Canacol Energy reported a loss of US$0.029 per share, whereas the analysts had previously expected a profit. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the seven analysts covering Canacol Energy are now predicting revenues of US$299.1m in 2021. If met, this would reflect a modest 7.3% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to jump 225% to US$0.36. In the lead-up to this report, the analysts had been modelling revenues of US$298.8m and earnings per share (EPS) of US$0.36 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of CA$5.96, suggesting that the company has met expectations in its recent result. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Canacol Energy, with the most bullish analyst valuing it at CA$7.50 and the most bearish at CA$4.50 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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. We would highlight that Canacol Energy's revenue growth is expected to slow, with the forecast 7.3% annualised growth rate until the end of 2021 being well below the historical 20% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. Factoring in the forecast slowdown in growth, it seems obvious that Canacol Energy is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$5.96, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Canacol Energy going out to 2022, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Canacol Energy .
This article by Simply Wall St is general in nature. 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.
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