Imperial Oil Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Last week saw the newest quarterly earnings release from Imperial Oil Limited (TSE:IMO), an important milestone in the company's journey to build a stronger business. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at CA$11b, statutory earnings beat expectations by a notable 14%, coming in at CA$1.86 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the most recent consensus for Imperial Oil from eight analysts is for revenues of CA$51.8b in 2025. If met, it would imply a satisfactory 4.5% increase on its revenue over the past 12 months. Statutory earnings per share are expected to drop 15% to CA$7.85 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$57.5b and earnings per share (EPS) of CA$7.63 in 2025. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

Check out our latest analysis for Imperial Oil

There's been no real change to the average price target of CA$106, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Imperial Oil, with the most bullish analyst valuing it at CA$129 and the most bearish at CA$81.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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 Imperial Oil's revenue growth is expected to slow, with the forecast 9.3% annualised growth rate until the end of 2025 being well below the historical 15% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.5% per year. So it's pretty clear that, while Imperial Oil's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Imperial Oil's earnings potential next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. 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.

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 Imperial Oil going out to 2027, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Imperial Oil , and understanding it should be part of your investment process.

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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.