The latest analyst coverage could presage a bad day for Capricorn Energy PLC (LON:CNE), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook – perhaps a sign that investors should temper their expectations as well.
Following the latest downgrade, the current consensus, from the four analysts covering Capricorn Energy, is for revenues of US$128m in 2025, which would reflect a considerable 13% reduction in Capricorn Energy’s sales over the past 12 months. Before the latest update, the analysts were foreseeing US$164m of revenue in 2025. The consensus view seems to have become more pessimistic on Capricorn Energy, noting the sizeable cut to revenue estimates in this update.
See our latest analysis for Capricorn Energy
LSE:CNE Earnings and Revenue Growth April 6th 2025
Notably, the analysts have cut their price target 7.5% to US$3.46, suggesting concerns around Capricorn Energy’s valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Capricorn Energy analyst has a price target of US$4.55 per share, while the most pessimistic values it at US$2.46. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Capricorn Energy’s past performance and to peers in the same industry. Over the past five years, revenues have declined around 6.7% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 13% decline in revenue until the end of 2025. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 0.05% annually. So while a broad number of companies are forecast to grow, unfortunately Capricorn Energy is expected to see its sales affected worse than other companies in the industry.
The clear low-light was that analysts slashing their revenue forecasts for Capricorn Energy this year. They’re also anticipating slower revenue growth than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn’t be surprised if the market became a lot more cautious on Capricorn Energy after today.
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