It's been a good week for CNOOC Limited (HKG:883) shareholders, because the company has just released its latest third-quarter results, and the shares gained 2.4% to HK$24.52. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥243b, statutory earnings were in line with expectations, at CN¥0.70 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for CNOOC from 13 analysts is for revenues of CN¥455.9b in 2027. If met, it would imply a credible 3.3% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 7.1% to CN¥3.14. Before this earnings report, the analysts had been forecasting revenues of CN¥448.3b and earnings per share (EPS) of CN¥3.08 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
See our latest analysis for CNOOC
It will come as no surprise then, to learn that the consensus price target is largely unchanged at HK$31.90. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic CNOOC analyst has a price target of HK$45.66 per share, while the most pessimistic values it at HK$17.51. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CNOOC's past performance and to peers in the same industry. We would highlight that CNOOC's revenue growth is expected to slow, with the forecast 2.6% annualised growth rate until the end of 2027 being well below the historical 7.2% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 0.2% per year. So it's pretty clear that, while CNOOC's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at HK$31.90, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for CNOOC going out to 2028, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for CNOOC you should be aware of, and 1 of them makes us a bit uncomfortable.
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