One thing we could say about the analysts on Par Pacific Holdings, Inc. (NYSE:PARR) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the latest downgrade, the current consensus, from the four analysts covering Par Pacific Holdings, is for revenues of US$1.7b in 2020, which would reflect a sizeable 69% reduction in Par Pacific Holdings' sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$3.0b in 2020. The consensus view seems to have become more pessimistic on Par Pacific Holdings, noting the sizeable cut to revenue estimates in this update.
There was no particular change to the consensus price target of US$11.17, with Par Pacific Holdings' latest outlook seemingly not enough to result in a change of valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Par Pacific Holdings, with the most bullish analyst valuing it at US$15.00 and the most bearish at US$9.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Par Pacific Holdings shareholders.
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. We would highlight that sales are expected to reverse, with the forecast 69% revenue decline a notable change from historical growth of 20% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 8.7% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Par Pacific Holdings is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Par Pacific Holdings after today.
Unsatisfied? At least one of Par Pacific Holdings' four analysts has provided estimates out to 2022, which can be seen for free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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