New predictions: Here’s what analysts think the future holds for Perenti Global Limited (ASX:PRN)
Perenti Global Limited (ASX:PRN) Shareholders will have a reason to smile today as analysts deliver substantial improvements to this year’s forecast. Analysts have significantly raised their earnings estimates, suggesting a marked improvement in the company’s fundamentals.
Following the upgrade, the most recent consensus for Perenti Global from its four analysts is for revenue of A$2.4 billion in 2022, which if achieved would represent a reasonable increase of 7. 8% of its sales over the last 12 months. Earnings per share are expected to rise 42% to AU$0.07. Previously, analysts had modeled revenue of A$2.1 billion and earnings per share (EPS) of A$0.062 in 2022. There has certainly been an improvement in perception recently, with analysts significantly raising their estimates of profits and income.
See our latest analysis for Perenti Global
Despite these upgrades, analysts haven’t made any major changes to their price target of AU$1.05, suggesting that the higher estimates are unlikely to have a long-term impact on the value of the action. It might also be instructive to look at the range of analysts’ estimates, to gauge how different the outlier opinions are from the mean. The most optimistic Perenti Global analyst has a price target of AU$1.20 per share, while the most pessimistic puts it at AU$1.00. Still, with such a narrow range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Another way to view these estimates is in the context of the big picture, such as how the forecast compares to past performance, and whether the forecast is more or less optimistic compared to other companies in the industry. We emphasize that Perenti Global’s revenue growth is expected to slow, with the projected annualized growth rate of 16% through the end of 2022 being well below the historic growth of 24% per year over the past five years. In contrast, our data suggests that other companies (with analyst coverage) in a similar industry should see their revenue decline by 0.2% per year. Taking into account the expected slowdown in growth, it is quite clear that Perenti Global should still grow faster than the entire sector.
The biggest lesson for us from these new estimates is that analysts have raised their earnings per share estimates, with an improvement in earnings power expected for this year. On the plus side, they also raised their earnings estimates and the company is expected to perform better than the broader market. Some investors might be disappointed to see the price target unchanged, but we believe improving fundamentals are generally positive – assuming these predictions come true! Perenti Global could therefore be a good candidate for further research.
Yet the company’s long-term outlook is far more relevant than next year’s earnings. We have estimates – from several Perenti Global analysts – going out to 2024, and you can see them for free on our platform here.
Another way to search for interesting businesses that might be reach an inflection point is to track whether management is buying or selling, with our free list of growing companies insiders are buying.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.