NuVista Energy Ltd. Just Missed EPS By 45%: Here's What Analysts Think Will Happen Next

As you might know, NuVista Energy Ltd. (TSE:NVA) last week released its latest first-quarter, and things did not turn out so great for shareholders. Results showed a clear earnings miss, with CA$255m revenue coming in 7.6% lower than what the analystsexpected. Statutory earnings per share (EPS) of CA$0.17 missed the mark badly, arriving some 45% below what was 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for NuVista Energy

Taking into account the latest results, the most recent consensus for NuVista Energy from four analysts is for revenues of CA$1.34b in 2024. If met, it would imply a decent 11% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be CA$1.54, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$1.33b and earnings per share (EPS) of CA$1.64 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at CA$16.12, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on NuVista Energy, with the most bullish analyst valuing it at CA$20.50 and the most bearish at CA$14.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. It's pretty clear that there is an expectation that NuVista Energy's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 16% growth on an annualised basis. This is compared to a historical growth rate of 26% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.7% per year. So it's pretty clear that, while NuVista Energy's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for NuVista Energy. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple NuVista Energy analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for NuVista Energy 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.