Yahoo Finance Results: Suncor Energy Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
It's been a good week for Suncor Energy Inc. (TSE:SU) shareholders, because the company has just released its latest first-quarter results, and the shares gained 5.6% to CA$54.93. The result was positive overall - although revenues of CA$13b were in line with what the analysts predicted, Suncor Energy surprised by delivering a statutory profit of CA$1.25 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Suncor Energy
Taking into account the latest results, the consensus forecast from Suncor Energy's seven analysts is for revenues of CA$54.9b in 2024. This reflects a solid 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to dip 8.6% to CA$5.58 in the same period. Before this earnings report, the analysts had been forecasting revenues of CA$50.6b and earnings per share (EPS) of CA$5.62 in 2024. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small increase to to revenue forecasts.
It may not be a surprise to see thatthe analysts have reconfirmed their price target of CA$56.83, implying that the uplift in revenue is not expected to greatly contribute to Suncor Energy's valuation in the near term. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Suncor Energy analyst has a price target of CA$75.00 per share, while the most pessimistic values it at CA$50.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Suncor Energy's past performance and to peers in the same industry. It's clear from the latest estimates that Suncor Energy's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 11% 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 5.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Suncor Energy is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at CA$56.83, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Suncor Energy analysts - going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Suncor Energy you should be aware of, and 1 of them is a bit concerning.
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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.
