Gibson Energy Inc. (TSE:GEI) Annual Results Just Came Out: Here's What Analysts Are Forecasting For This Year

It's been a good week for Gibson Energy Inc. (TSE:GEI) shareholders, because the company has just released its latest yearly results, and the shares gained 5.2% to CA$21.90. It looks like the results were a bit of a negative overall. While revenues of CA$11b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.8% to hit CA$1.41 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 current consensus, from the nine analysts covering Gibson Energy, is for revenues of CA$10.1b in 2024. This implies a not inconsiderable 8.4% reduction in Gibson Energy's revenue over the past 12 months. Statutory earnings per share are predicted to swell 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 small dip in per-share earnings estimates, perhaps acknowledging the investment required to grow the business.

There's been no major changes to the price target of CA$24.96, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Gibson Energy analyst has a price target of CA$27.00 per share, while the most pessimistic values it at CA$21.00. This is a very narrow spread of estimates, implying either that Gibson Energy is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 8.4% by the end of 2024. This indicates a significant reduction from annual 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. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Gibson Energy is expected to lag 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. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at CA$24.96, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Gibson Energy going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Gibson Energy that you should be aware of.

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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.