Party Time: Brokers Just Made Major Increases To Their Gulf Keystone Petroleum Limited (LON:GKP) Earnings Forecasts

( ) 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. After the upgrade, the five analysts covering Gulf Keystone Petroleum are now predicting revenues of US$140m in 2024.

If met, this would reflect a huge 22% improvement in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$0.038 in per-share earnings.



Previously, the analysts had been modelling revenues of US$124m and earnings per share (EPS) of US$0.013 in 2024. 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.

Despite these upgrades, the analysts have not made any major changes to their price target of US$2.19, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Gulf Keystone Petroleum at US$2.50 per share, while the most bearish prices it at US$1.58.

There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view. Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Gulf Keystone Petroleum's rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.

7% p.a. over the past five years.

Compare this with other companies in the same industry, which are forecast to see a revenue decline of 0.7% annually. So it's clear with the acceleration in growth, Gulf Keystone Petroleum is expected to grow meaningfully faster than the wider industry.

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Gulf Keystone Petroleum.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Gulf Keystone Petroleum analysts - going out to 2026, and you can Another way to search for interesting companies that could be is to track whether management are buying or selling, with our ..