Market forces rained on the parade of Pembina Pipeline Corporation (TSE:PPL) shareholders today, when the analysts downgraded their forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

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Following the latest downgrade, the current consensus, from the seven analysts covering Pembina Pipeline, is for revenues of CA$7.1b in 2025, which would reflect a not inconsiderable 12% reduction in Pembina Pipeline's sales over the past 12 months. Statutory earnings per share are supposed to shrink 3.1% to CA$2.97 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 TSX:PPL Earnings and Revenue Growth May 14th 2025

Analysts made no major changes to their price target of CA$60.83, suggesting the downgrades are not expected to have a long-term impact on Pembina Pipeline's valuation.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 16% by the end of 2025. This indicates a significant reduction from annual growth of 4.6% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.1% annually for the foreseeable future. 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales 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.

Story Continues

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.

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