Shareholders might have noticed that Helmerich & Payne, Inc. (NYSE:HP) filed its third-quarter result this time last week. The early response was not positive, with shares down 4.3% to US$18.46 in the past week. It looks like the results were pretty good overall. While revenues of US$317m were in line with analyst predictions, statutory losses were much smaller than expected, with Helmerich & Payne losing US$0.43 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Helmerich & Payne after the latest results.
Taking into account the latest results, the current consensus, from the 19 analysts covering Helmerich & Payne, is for revenues of US$1.17b in 2021, which would reflect a concerning 47% reduction in Helmerich & Payne's sales over the past 12 months. Losses are predicted to fall substantially, shrinking 26% to US$2.72. Before this latest report, the consensus had been expecting revenues of US$1.17b and US$2.72 per share in losses.
The consensus price target was unchanged at US$20.00, suggesting that the business - losses and all - is executing in line with estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Helmerich & Payne analyst has a price target of US$31.00 per share, while the most pessimistic values it at US$11.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with the forecast 47% revenue decline a notable change from historical growth of 1.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Helmerich & Payne is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. 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$20.00, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Helmerich & Payne. Long-term earnings power is much more important than next year's profits. We have forecasts for Helmerich & Payne going out to 2024, and you can see them free on our platform here.
Even so, be aware that Helmerich & Payne is showing 2 warning signs in our investment analysis , and 1 of those shouldn't be ignored...
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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