Yahoo Finance News Flash: Analysts Just Made A Sizeable Upgrade To Their Tourmaline Oil Corp. (TSE:TOU) Forecasts
Tourmaline Oil Corp. (TSE:TOU) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The revenue forecast for next year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. Investor sentiment seems to be improving too, with the share price up 9.4% to CA$18.89 over the past 7 days. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
Following the upgrade, the most recent consensus for Tourmaline Oil from its five analysts is for revenues of CA$2.8b in 2021 which, if met, would be a major 41% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 637% to CA$1.67. Before this latest update, the analysts had been forecasting revenues of CA$2.5b and earnings per share (EPS) of CA$1.59 in 2021. The forecasts seem more optimistic now, with a decent improvement in revenue and a small lift in earnings per share estimates.
Check out our latest analysis for Tourmaline Oil
It will come as no surprise to learn that the analysts have increased their price target for Tourmaline Oil 8.9% to CA$26.17 on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Tourmaline Oil analyst has a price target of CA$33.00 per share, while the most pessimistic values it at CA$12.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
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. It's clear from the latest estimates that Tourmaline Oil's rate of growth is expected to accelerate meaningfully, with the forecast 41% revenue growth noticeably faster than its historical growth of 14% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Tourmaline Oil to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for next year. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at Tourmaline Oil.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Tourmaline Oil analysts - going out to 2021, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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