EQT Corporation (NYSE:EQT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.
Following the latest upgrade, the 13 analysts covering EQT provided consensus estimates of US$5.9b revenue in 2022, which would reflect a sizeable 43% decline on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$0.46 in per-share earnings. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$5.2b and losses of US$1.05 per share in 2022. So we can see that this has sparked a pretty clear upgrade to expectations, with higher revenues anticipated to lead to profit sooner than previously forecast.
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$55.67, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 EQT analyst has a price target of US$78.00 per share, while the most pessimistic values it at US$45.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await EQT shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the EQT's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 68% by the end of 2022. This indicates a significant reduction from annual growth of 18% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 5.5% per year. So it's pretty clear that EQT's revenues are expected to shrink faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that there is now an expectation for EQT to become profitable this year, compared to previous expectations of a loss. Notably, analysts also upgraded their revenue estimates, with sales performing well although EQT's revenue growth is expected to trail that of the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at EQT.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple EQT analysts - going out to 2024, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.
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