Yahoo Finance Here's What Analysts Are Forecasting For ConocoPhillips Company After Its Yearly Results
Last week saw the newest annual earnings release from ConocoPhillips Company (NYSE:COP), an important milestone in the company's journey to build a stronger business. Revenues of US$37b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$6.40, missing estimates by 2.1%. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
See our latest analysis for ConocoPhillips
Following the recent earnings report, the consensus from14 analysts covering ConocoPhillips expects revenues of US$33.1b in 2020, implying a definite 9.6% decline in sales compared to the last 12 months. Statutory earnings per share are expected to plummet 49% to US$3.27 in the same period. In the lead-up to this report, analysts had been modelling revenues of US$33.2b and earnings per share (EPS) of US$3.56 in 2020. Analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share forecasts for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$74.75, with analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on ConocoPhillips, with the most bullish analyst valuing it at US$85.00 and the most bearish at US$65.00 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
It can also be useful to step back and take a broader view of how analyst forecasts compare to ConocoPhillips's performance in recent years. One thing that stands out from these estimates is that, even though revenues are forecast to keep falling, the decline is expected to accelerate. Analysts have modelled a 9.6% decline next year, compared to a historical decline of 2.2% per annum for the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the market are forecast to see their revenue decline 4.3% per year. It seems clear that while revenues are expected to continue declining, analysts also expect the downturn to be more severe than that of the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that ConocoPhillips's revenues are expected to perform worse than the wider market. The consensus price target held steady at US$74.75, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that in mind, we wouldn't be too quick to come to a conclusion on ConocoPhillips. Long-term earnings power is much more important than next year's profits. We have forecasts for ConocoPhillips going out to 2023, and you can see them free on our platform here.
It might also be worth considering whether ConocoPhillips's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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