Golar LNG Limited (NASDAQ:GLNG) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
As you might know, Golar LNG Limited (NASDAQ:GLNG) recently reported its yearly numbers. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 4.0%to hit US$298m. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Golar LNG
After the latest results, the six analysts covering Golar LNG are now predicting revenues of US$364.7m in 2024. If met, this would reflect a major 22% improvement in revenue compared to the last 12 months. Golar LNG is also expected to turn profitable, with statutory earnings of US$1.68 per share. In the lead-up to this report, the analysts had been modelling revenues of US$398.8m and earnings per share (EPS) of US$1.83 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
The analysts made no major changes to their price target of US$30.06, suggesting the downgrades are not expected to have a long-term impact on Golar LNG's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Golar LNG, with the most bullish analyst valuing it at US$35.50 and the most bearish at US$25.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Golar LNG's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 22% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 15% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 1.8% annually. Not only are Golar LNG's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at US$30.06, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Golar LNG analysts - going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Golar LNG you should know about.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
