New Forecasts: Here's What Analysts Think The Future Holds For Baytex Energy Corp. (TSE:BTE)

Baytex Energy Corp. (TSE:BTE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

After the upgrade, the three analysts covering Baytex Energy are now predicting revenues of CA$3.6b in 2023. If met, this would reflect a substantial 55% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to nosedive 37% to CA$0.99 in the same period. Before this latest update, the analysts had been forecasting revenues of CA$2.3b and earnings per share (EPS) of CA$0.91 in 2023. The most recent forecasts are noticeably more optimistic, with a great increase in revenue estimates and a lift to earnings per share as well.

See our latest analysis for Baytex Energy

As a result, it might be a surprise to see that the analysts have cut their price target 6.0% to CA$7.84, which could suggest the forecast improvement in performance is not expected to last. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Baytex Energy, with the most bullish analyst valuing it at CA$10.25 and the most bearish at CA$5.50 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Baytex Energy's rate of growth is expected to accelerate meaningfully, with the forecast 55% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 15% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 2.0% per year. It seems obvious that as part of the brighter growth outlook, Baytex Energy is expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Baytex Energy.

Analysts are definitely bullish on Baytex Energy, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including its declining profit margins. For more information, you can click through to our platform to learn more about this and the 1 other warning sign we've identified .

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.