Earnings Beat: TXO Energy Partners, L.P. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
As you might know, TXO Energy Partners, L.P. (NYSE:TXO) just kicked off its latest quarterly results with some very strong numbers. Statutory earnings performance was extremely strong, with revenue of US$158m beating expectations by 113% and earnings per share (EPS) of US$2.86, an impressive 1,446%ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for TXO Energy Partners
Taking into account the latest results, the two analysts covering TXO Energy Partners provided consensus estimates of US$339.0m revenue in 2023, which would reflect a definite 18% decline on its sales over the past 12 months. Statutory earnings per share are expected to dive 61% to US$1.80 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$309.0m and earnings per share (EPS) of US$2.00 in 2023. So it's pretty clear consensus is mixed on TXO Energy Partners after the latest results; whilethe analysts lifted revenue numbers, they also administered a minor downgrade to per-share earnings expectations.
There's been no major changes to the price target of US$31.67, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 23% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 142% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 3.6% annually for the foreseeable future. The forecasts do look bearish for TXO Energy Partners, since they're expecting it to shrink faster than the 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. Fortunately, they also upgraded their revenue estimates, although TXO Energy Partners'revenues are still expected to trail the wider industry. The consensus price target held steady at US$31.67, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for TXO Energy Partners (1 is significant!) that 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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
