International Petroleum Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Last week saw the newest quarterly earnings release from International Petroleum Corporation (TSE:IPCO), an important milestone in the company's journey to build a stronger business. International Petroleum reported US$178m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.13 beat expectations, being 5.4% higher than what the analysts expected. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following the recent earnings report, the consensus from six analysts covering International Petroleum is for revenues of US$738.1m in 2025. This implies a discernible 3.6% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to decrease 3.6% to US$0.71 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$741.8m and earnings per share (EPS) of US$0.67 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

View our latest analysis for International Petroleum

The consensus price target was unchanged at CA$21.61, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. The most optimistic International Petroleum analyst has a price target of CA$28.89 per share, while the most pessimistic values it at CA$15.06. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We would highlight that revenue is expected to reverse, with a forecast 4.7% annualised decline to the end of 2025. That is a notable change from historical growth of 15% 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 3.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - International Petroleum is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards International Petroleum following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that International Petroleum's revenue is expected to perform worse than the wider industry. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for International Petroleum going out to 2027, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for International Petroleum that you need to be mindful 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.