The Gibson Energy Inc. (TSE:GEI) Yearly Results Are Out And Analysts Have Published New Forecasts
Investors in Gibson Energy Inc. (TSE:GEI) had a good week, as its shares rose 5.2% to close at CA$21.90 following the release of its annual results. Revenues of CA$11b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CA$1.41, missing estimates by 3.8%. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Gibson Energy
Taking into account the latest results, the nine analysts covering Gibson Energy provided consensus estimates of CA$10.1b revenue in 2024, which would reflect an uneasy 8.4% decline over the past 12 months. Statutory earnings per share are predicted to climb 19% to CA$1.58. In the lead-up to this report, the analysts had been modelling revenues of CA$8.10b and earnings per share (EPS) of CA$1.64 in 2024. Although revenue sentiment looks to be improving, the analysts have made a minor downgrade to per-share earnings estimates, perhaps acknowledging the investment required to grow the business.
The consensus price target was unchanged at CA$24.96, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Gibson Energy, with the most bullish analyst valuing it at CA$27.00 and the most bearish at CA$21.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Gibson Energy is an easy business to forecast or the the analysts are all using similar assumptions.
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. We would highlight that revenue is expected to reverse, with a forecast 8.4% annualised decline to the end of 2024. That is a notable change from historical growth of 13% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.3% annually for the foreseeable future. It's pretty clear that Gibson 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. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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. We have forecasts for Gibson Energy going out to 2026, and you can see them free on our platform here.
Even so, be aware that Gibson Energy is showing 3 warning signs in our investment analysis , you should know about...
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.
