Yahoo Finance Growth Investors: Industry Analysts Just Upgraded Their Woodside Petroleum Ltd (ASX:WPL) Revenue Forecasts By 10%
Celebrations may be in order for Woodside Petroleum Ltd (ASX:WPL) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.
After the upgrade, the ten analysts covering Woodside Petroleum are now predicting revenues of US$8.4b in 2022. If met, this would reflect a substantial 21% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 60% to US$3.21. Previously, the analysts had been modelling revenues of US$7.7b and earnings per share (EPS) of US$3.18 in 2022. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.
View our latest analysis for Woodside Petroleum
It may not be a surprise to see that the analysts have reconfirmed their price target of US$24.44, implying that the uplift in sales is not expected to greatly contribute to Woodside Petroleum's valuation in the near term. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Woodside Petroleum, with the most bullish analyst valuing it at US$40.21 and the most bearish at US$29.67 per share. 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Woodside Petroleum's growth to accelerate, with the forecast 29% annualised growth to the end of 2022 ranking favourably alongside historical growth of 4.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Woodside Petroleum is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Woodside Petroleum.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Woodside Petroleum going out to 2024, and you can see them free on our platform here..
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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.
