One thing we could say about the analysts on Genel Energy plc (LON:GENL) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the consensus from Genel Energy's four analysts is for revenues of US$209m in 2023, which would reflect a painful 52% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of US$246m in 2023. The consensus view seems to have become more pessimistic on Genel Energy, noting the substantial drop in revenue estimates in this update.

View our latest analysis for Genel Energy  earnings-and-revenue-growth

There was no particular change to the consensus price target of US$2.22, with Genel Energy's latest outlook seemingly not enough to result in a change of valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Genel Energy at US$2.25 per share, while the most bearish prices it at US$1.54. 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 Genel Energy shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 52% by the end of 2023. This indicates a significant reduction from annual growth of 4.1% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 2.6% per year. The forecasts do look bearish for Genel Energy, since they're expecting it to shrink faster than the industry.



The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Genel Energy this year. They're also forecasting for revenues to shrink at a quicker rate than companies in the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Genel Energy after today.

Unanswered questions? At least one of Genel Energy's four analysts has provided estimates out to 2025, 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.

Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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