Celebrations may be in order for Brigham Minerals, Inc. (NYSE:MNRL) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company’s business prospects.
Following the upgrade, the current consensus from Brigham Minerals’ four analysts is for revenues of US$373m in 2022 which – if met – would reflect a sizeable 48% increase on its sales over the past 12 months. Per-share earnings are expected to jump 42% to US$2.75. Prior to this update, the analysts had been forecasting revenues of US$316m and earnings per share (EPS) of US$2.68 in 2022. The forecasts seem more optimistic now, with a decent improvement in revenue and a modest lift to earnings per share estimates.
Despite these upgrades, the analysts have not made any major changes to their price target of US$36.43, 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. There are some variant perceptions on Brigham Minerals, with the most bullish analyst valuing it at US$46.00 and the most bearish at US$31.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Brigham Minerals shareholders.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It’s clear from the latest estimates that Brigham Minerals’ rate of growth is expected to accelerate meaningfully, with the forecast 119% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 34% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 6.1% per year. So it’s clear with the acceleration in growth, Brigham Minerals is expected to grow meaningfully faster than the wider industry.
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. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Seeing the dramatic upgrade to this year’s forecasts, it might be time to take another look at Brigham Minerals.
Analysts are clearly in love with Brigham Minerals at the moment, but before diving in – you should be aware that we’ve identified some warning flags with the business, such as the risk of cutting its dividend. You can learn more, and discover the 2 other concerns we’ve identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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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.
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