Yahoo Finance Analysts Just Slashed Their Cooper Energy Limited (ASX:COE) EPS Numbers
The latest analyst coverage could presage a bad day for Cooper Energy Limited (ASX:COE), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the downgrade, the most recent consensus for Cooper Energy from its eight analysts is for revenues of AU$100m in 2020 which, if met, would be a sizeable 27% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to drop 12% to AU$0.0037 in the same period. Before this latest update, the analysts had been forecasting revenues of AU$124m and earnings per share (EPS) of AU$0.013 in 2020. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.
See our latest analysis for Cooper Energy
Despite the cuts to forecast earnings, there was no real change to the AU$0.57 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Cooper Energy at AU$0.70 per share, while the most bearish prices it at AU$0.44. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Cooper Energy's rate of growth is expected to accelerate meaningfully, with the forecast 27% revenue growth noticeably faster than its historical growth of 22% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.6% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Cooper Energy is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Cooper Energy.
Unfortunately, the earnings downgrade - if accurate - may also place pressure on Cooper Energy'smountain of debt, which could lead to some belt tightening for shareholders. See why we're concerned about Cooper Energy's balance sheet by visiting our risks dashboard for free on our platform here.
We also provide an overview of the Cooper Energy Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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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