Downgrade: Here's How Analysts See PBF Energy Inc (NYSE:PBF) Performing In The Near Term
One thing we could say about the analysts on PBF Energy Inc (NYSE:PBF) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
After the downgrade, the consensus from PBF Energy's ten analysts is for revenues of US$21b in 2020, which would reflect a chunky 14% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of US$24b in 2020. It looks like forecasts have become a fair bit less optimistic on PBF Energy, given the substantial drop in revenue estimates.
See our latest analysis for PBF Energy
The consensus price target fell 11% to US$17.05, with the analysts clearly less optimistic about PBF Energy's valuation following this update. 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 PBF Energy, with the most bullish analyst valuing it at US$55.00 and the most bearish at US$4.75 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 14% revenue decline a notable change from historical growth of 13% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 3.0% annually for the foreseeable future. So it's pretty clear that PBF Energy's revenues are expected to shrink faster than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for PBF Energy this year. They're also forecasting for revenues to shrink at a quicker rate than companies in the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of PBF Energy.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with PBF Energy's financials, such as dilutive stock issuance over the past year. Learn more, and discover the 3 other flags we've identified, for free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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