Yahoo Finance Analysts Just Shipped A Notable Upgrade To Their Bonanza Creek Energy, Inc. (NYSE:BCEI) Estimates
Bonanza Creek Energy, Inc. (NYSE:BCEI) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.
Following the upgrade, the consensus from four analysts covering Bonanza Creek Energy is for revenues of US$232m in 2020, implying a disturbing 23% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to tumble 41% to US$4.33 in the same period. Prior to this update, the analysts had been forecasting revenues of US$203m and earnings per share (EPS) of US$2.74 in 2020. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
Check out our latest analysis for Bonanza Creek Energy
It will come as no surprise to learn that the analysts have increased their price target for Bonanza Creek Energy 5.8% to US$22.00 on the back of these upgrades. 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 Bonanza Creek Energy at US$38.00 per share, while the most bearish prices it at US$13.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how think this business will perform. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One more thing stood out to us about these estimates, and it's the idea that Bonanza Creek Energy'sdecline is expected to accelerate, with revenues forecast to fall 23% next year, topping off a historical decline of 5.6% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 8.9% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Bonanza Creek Energy to suffer worse than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Bonanza Creek Energy could be worth investigating further.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Bonanza Creek Energy going out to 2022, and you can see them 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 upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
