Newsflash: Pembina Pipeline Corporation (TSE:PPL) Analysts Have Been Trimming Their Revenue Forecasts

Today is shaping up negative for Pembina Pipeline Corporation (TSE:PPL) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

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Following the latest downgrade, the current consensus, from the seven analysts covering Pembina Pipeline, is for revenues of CA$7.5b in 2025, which would reflect a considerable 8.2% reduction in Pembina Pipeline's sales over the past 12 months. Statutory earnings per share are supposed to dip 2.8% to CA$2.98 in the same period. Previously, the analysts had been modelling revenues of CA$8.3b and earnings per share (EPS) of CA$3.06 in 2025. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a minor downgrade to EPS estimates to boot.

Check out our latest analysis for Pembina Pipeline

Despite the cuts to forecast earnings, there was no real change to the CA$60.83 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

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 sales are expected to reverse, with a forecast 11% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 4.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.1% per year. It's pretty clear that Pembina Pipeline's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Pembina Pipeline's revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Pembina Pipeline going forwards.

Worse, Pembina Pipeline is labouring under a substantial debt burden, which - if today's forecasts prove accurate - the forecast downgrade could potentially exacerbate. See why we're concerned about Pembina Pipeline's balance sheet by visiting our risks dashboard for free on our platform here.

You can also see our analysis of Pembina Pipeline's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.