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UK£0.80: That's What Analysts Think Great Eastern Energy Corporation Limited (LON:GEEC) Is Worth After Its Latest Results

Investors in Great Eastern Energy Corporation Limited (LON:GEEC) had a good week, as its shares rose 6.1% to close at UK£0.17 following the release of its full-year results. It was a weak result overall, with Great Eastern Energy reporting US$36m in revenues, which was 31% less than what the analyst had expected. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.

View our latest analysis for Great Eastern Energy

LSE:GEEC Past and Future Earnings June 5th 2020
LSE:GEEC Past and Future Earnings June 5th 2020

Following the latest results, Great Eastern Energy's lone analyst are now forecasting revenues of US$38.0m in 2021. This would be a modest 4.8% improvement in sales compared to the last 12 months. Prior to the latest earnings, the analyst was forecasting revenues of US$59.9m in 2021, and did not provide an earnings per share estimate. It looks like the analyst has become a fair bit less optimistic on Great Eastern Energy's prospects, given the large cut to revenue estimates after the latest results.

The average price target fell 78% to UK£0.80, withthe analyst clearly having become less optimistic about Great Eastern Energy'sprospects following its latest earnings.

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. We would highlight that Great Eastern Energy's revenue growth is expected to slow, with forecast 4.8% increase next year well below the historical 6.3%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% 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 Great Eastern Energy.

The Bottom Line

The clear low-light was that the analyst cut their forecast revenue estimates for Great Eastern Energy next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

We have estimates for Great Eastern Energy from one covering analyst, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Great Eastern Energy (at least 1 which is potentially serious) , and understanding these should be part of your investment process.

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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. 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. Thank you for reading.