W&T Offshore, Inc. (NYSE:WTI) Just Reported, And Analysts Assigned A US$2.97 Price Target
As you might know, W&T Offshore, Inc. (NYSE:WTI) just kicked off its latest third-quarter results with some very strong numbers. Revenues and losses per share were both better than expected, with revenues of US$73m leading estimates by 5.4%. Statutory losses were smaller than the analystsexpected, coming in at US$0.09 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for W&T Offshore
Taking into account the latest results, W&T Offshore's twin analysts currently expect revenues in 2021 to be US$396.7m, approximately in line with the last 12 months. The company is forecast to report a statutory loss of US$0.31 in 2021, a sharp decline from a profit over the last year. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$398.0m and losses of US$0.48 per share in 2021. Although the revenue estimates have not really changed W&T Offshore'sfuture looks a little different to the past, with a the loss per share forecasts in particular.
The consensus price target fell 5.3% to US$2.97despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the W&T Offshore's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 1.1%, a significant reduction from annual growth of 1.9% 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 11% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - W&T Offshore is expected to lag the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss 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. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on W&T Offshore. Long-term earnings power is much more important than next year's profits. We have analyst estimates for W&T Offshore going out as far as 2022, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 5 warning signs for W&T Offshore (of which 2 are a bit concerning!) you should know about.
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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