Shareholders might have noticed that Pembina Pipeline Corporation (TSE:PPL) filed its full-year result this time last week. The early response was not positive, with shares down 5.8% to CA$32.36 in the past week. Things were not great overall, with a surprise (statutory) loss of CA$0.86 per share on revenues of CA$6.2b, even though the analysts had been expecting a profit. The analysts 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Pembina Pipeline

Taking into account the latest results, the consensus forecast from Pembina Pipeline's eight analysts is for revenues of CA$6.60b in 2021, which would reflect a reasonable 6.4% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Pembina Pipeline forecast to report a statutory profit of CA$2.19 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$6.57b and earnings per share (EPS) of CA$2.27 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at CA$38.70, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Pembina Pipeline, with the most bullish analyst valuing it at CA$42.00 and the most bearish at CA$34.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. We would highlight that Pembina Pipeline's revenue growth is expected to slow, with forecast 6.4% increase next year well below the historical 11%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% next year. Factoring in the forecast slowdown in growth, it seems obvious that Pembina Pipeline is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Pembina Pipeline. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Pembina Pipeline's revenues are expected to perform worse than the wider industry. The consensus price target held steady at CA$38.70, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Pembina Pipeline. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Pembina Pipeline going out to 2022, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Pembina Pipeline that you should be aware of.

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.

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