Growth Investors: Industry Analysts Just Upgraded Their Keyera Corp. (TSE:KEY) Revenue Forecasts By 12%

Keyera Corp. (TSE:KEY) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Keyera will make substantially more sales than they'd previously expected.

Following the upgrade, the most recent consensus for Keyera from its four analysts is for revenues of CA$6.7b in 2022 which, if met, would be an okay 3.3% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to dip 4.2% to CA$1.94 in the same period. Previously, the analysts had been modelling revenues of CA$6.0b and earnings per share (EPS) of CA$1.77 in 2022. The most recent forecasts are noticeably more optimistic, with a substantial gain in revenue estimates and a lift to earnings per share as well.

Check out our latest analysis for Keyera

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$36.35, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. Currently, the most bullish analyst values Keyera at CA$39.00 per share, while the most bearish prices it at CA$30.00. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

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. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 6.7% growth on an annualised basis. That is in line with its 7.1% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 0.8% per year. So although Keyera is expected to maintain its revenue growth rate, it's definitely 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Keyera.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential risk with Keyera, including the risk of cutting its dividend. You can learn more, and discover the 1 other risk we've identified, for free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.