Yahoo Finance Topaz Energy Corp. Just Beat EPS By 36%: Here's What Analysts Think Will Happen Next
Topaz Energy Corp. (TSE:TPZ) defied analyst predictions to release its yearly results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 3.7% to hit CA$335m. Topaz Energy also reported a statutory profit of CA$0.33, which was an impressive 36% above what the analysts had forecast. 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.
See our latest analysis for Topaz Energy
Taking into account the latest results, the current consensus, from the four analysts covering Topaz Energy, is for revenues of CA$320.6m in 2024. This implies a discernible 4.2% reduction in Topaz Energy's revenue over the past 12 months. Statutory earnings per share are expected to tumble 45% to CA$0.18 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$330.0m and earnings per share (EPS) of CA$0.46 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.
The analysts made no major changes to their price target of CA$26.73, suggesting the downgrades are not expected to have a long-term impact on Topaz Energy's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Topaz Energy at CA$30.00 per share, while the most bearish prices it at CA$23.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. We would highlight that revenue is expected to reverse, with a forecast 4.2% annualised decline to the end of 2024. That is a notable change from historical growth of 36% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.4% annually for the foreseeable future. It's pretty clear that Topaz Energy's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CA$26.73, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Topaz 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 Topaz Energy you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
