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This Broker Just Slashed Their Texas Pacific Land Trust (NYSE:TPL) Earnings Forecasts

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The latest analyst coverage could presage a bad day for Texas Pacific Land Trust (NYSE:TPL), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following the latest downgrade, the current consensus, from the one analyst covering Texas Pacific Land Trust, is for revenues of US$298m in 2020, which would reflect a sizeable 39% reduction in Texas Pacific Land Trust's sales over the past 12 months. Statutory earnings per share are supposed to plummet 45% to US$22.49 in the same period. Previously, the analyst had been modelling revenues of US$444m and earnings per share (EPS) of US$38.40 in 2020. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Texas Pacific Land Trust

NYSE:TPL Past and Future Earnings April 1st 2020
NYSE:TPL Past and Future Earnings April 1st 2020

The consensus price target fell 24% to US$721, with the weaker earnings outlook clearly leading analyst valuation estimates.

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 revenue decline of 39%, a significant reduction from annual growth of 48% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 0.4% next year. The forecasts do look bearish for Texas Pacific Land Trust, since they're expecting it to shrink faster than the industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Texas Pacific Land Trust. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that Texas Pacific Land Trust revenue is expected to perform worse than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Texas Pacific Land Trust.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Texas Pacific Land Trust going out as far as 2022, 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.