The MEG Energy Corp. (TSE:MEG) Analysts Have Been Trimming Their Sales Forecasts

Market forces rained on the parade of MEG Energy Corp. (TSE:MEG) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the current consensus, from the three analysts covering MEG Energy, is for revenues of CA$4.6b in 2024, which would reflect a considerable 18% reduction in MEG Energy's sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CA$5.7b in 2024. It looks like forecasts have become a fair bit less optimistic on MEG Energy, given the measurable cut to revenue estimates.

See our latest analysis for MEG Energy

We'd point out that there was no major changes to their price target of CA$31.21, suggesting the latest estimates were not enough to shift their view on the value of the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 18% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 17% 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 4.2% annually for the foreseeable future. It's pretty clear that MEG Energy's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for MEG Energy this year. They also expect company revenue to perform worse than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of MEG Energy going forwards.

There might be good reason for analyst bearishness towards MEG Energy, like its declining profit margins. Learn more, and discover the 1 other concern we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.