The latest analyst coverage could presage a bad day for Peninsula Energy Limited (ASX:PEN), 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 analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, Peninsula Energy's four analysts currently expect revenues in 2025 to be US$12m, approximately in line with the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$0.18 in per-share earnings. Previously, the analysts had been modelling revenues of US$17m and earnings per share (EPS) of US$0.15 in 2025. Thus, there's been a definite swing in sentiment, with the analysts making a considerable reduction to this year's revenue estimates, while at the same time substantially upgrading EPS. It's almost as though the business is forecast to reduce its focus on growth to enhance profitability.

See our latest analysis for Peninsula Energy

the analysts have cut their price target 6.1% to AU$3.98 per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Peninsula Energy's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.1% growth on an annualised basis. This is compared to a historical growth rate of 37% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.9% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Peninsula Energy.

The Bottom Line

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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower 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. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Peninsula Energy going forwards.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Peninsula Energy's financials, such as major dilution from new stock issuance in the past year. Learn more, and discover the 1 other risk we've identified, 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 with high insider ownership.

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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.