Trican Well Service Ltd. (TSE:TCW) Analysts Are Reducing Their Forecasts For Next Year

One thing we could say about the analysts on Trican Well Service Ltd. (TSE:TCW) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the latest downgrade, the ten analysts covering Trican Well Service provided consensus estimates of CA$519m revenue in 2020, which would reflect an uneasy 18% decline on its sales over the past 12 months. Losses are expected to increase substantially, hitting CA$0.27 per share. However, before this estimates update, the consensus had been expecting revenues of CA$595m and CA$0.23 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

See our latest analysis for Trican Well Service

The consensus price target fell 16% to CA$1.00, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Trican Well Service analyst has a price target of CA$1.75 per share, while the most pessimistic values it at CA$0.65. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue shrink 8.2% per year. While this is interesting, Trican Well Service's, revenues are still expected to shrink next year, and at a faster rate than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that Trican Well Service revenue is expected to perform worse than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Trican Well Service going out to 2021, 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.

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