Paramount Resources Ltd. Just Missed Earnings; Here's What Analysts Are Forecasting Now
Last week, you might have seen that Paramount Resources Ltd. (TSE:POU) released its quarterly result to the market. The early response was not positive, with shares down 6.5% to CA$31.29 in the past week. Revenues of CA$322m beat estimates by a substantial 37% margin, but unfortunately Paramount Resources fell substantially short of earnings forecasts, reporting a statutory loss of CA$2.65 per share, where the analysts had previously predicted a profit. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following last week's earnings report, Paramount Resources' four analysts are forecasting 2027 revenues to be CA$1.19b, approximately in line with the last 12 months. Paramount Resources is also expected to turn profitable, with statutory earnings of CA$2.40 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$1.19b and earnings per share (EPS) of CA$2.40 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
See our latest analysis for Paramount Resources
The analysts reconfirmed their price target of CA$39.70, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Paramount Resources, with the most bullish analyst valuing it at CA$44.00 and the most bearish at CA$35.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Paramount Resources' past performance and to peers in the same industry. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2027. That would be a definite improvement, given that the past five years have seen revenue shrink 7.7% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 1.2% per year. Although Paramount Resources' revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Paramount Resources' revenue is expected to perform worse than the wider industry. The consensus price target held steady at CA$39.70, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Paramount Resources going out to 2028, and you can see them free on our platform here..
You still need to take note of risks, for example - Paramount Resources has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.