Yahoo Finance Analysts Are More Bearish On Touchstone Exploration Inc. (TSE:TXP) Than They Used To Be
Today is shaping up negative for Touchstone Exploration Inc. (TSE:TXP) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.
After this downgrade, Touchstone Exploration's three analysts are now forecasting revenues of US$63m in 2022. This would be a major 211% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 82% to US$0.049. Prior to this update, the analysts had been forecasting revenues of US$75m and earnings per share (EPS) of US$0.084 in 2022. Indeed, we can see that the analysts are a lot more bearish about Touchstone Exploration's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
Check out our latest analysis for Touchstone Exploration
Analysts made no major changes to their price target of CA$3.43, suggesting the downgrades are not expected to have a long-term impact on Touchstone Exploration's 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. The most optimistic Touchstone Exploration analyst has a price target of CA$4.50 per share, while the most pessimistic values it at CA$2.25. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Touchstone Exploration's growth to accelerate, with the forecast 211% annualised growth to the end of 2022 ranking favourably alongside historical growth of 0.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.0% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Touchstone Exploration to grow faster 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. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Touchstone Exploration.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Touchstone Exploration analysts - going out to 2024, and you can see them 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.
