Industry Analysts Just Made A Sizeable Upgrade To Their Gibson Energy Inc. (TSE:GEI) Revenue Forecasts
Shareholders in Gibson Energy Inc. (TSE:GEI) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.
Following the upgrade, the current consensus from Gibson Energy's nine analysts is for revenues of CA$6.9b in 2021 which - if met - would reflect a major 35% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 21% to CA$1.00. Before this latest update, the analysts had been forecasting revenues of CA$5.8b and earnings per share (EPS) of CA$1.01 in 2021. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.
Check out our latest analysis for Gibson Energy
It may not be a surprise to see that the analysts have reconfirmed their price target of CA$24.41, implying that the uplift in sales is not expected to greatly contribute to Gibson Energy's valuation in the near term. 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$28.00 and the most bearish at CA$22.00 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 underlying assumptions are obvious.
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. It's clear from the latest estimates that Gibson Energy's rate of growth is expected to accelerate meaningfully, with the forecast 49% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 5.2% 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 9.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Gibson Energy to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Gibson Energy.
Analysts are clearly in love with Gibson Energy at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as the risk of cutting its dividend. For more information, you can click through to our platform to learn more about this and the 2 other warning signs we've identified .
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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. 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.
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