Upgrade: Analysts Just Made A Dazzling Increase To Their Tenaz Energy Corp. (TSE:TNZ) Forecasts

Celebrations may be in order for Tenaz Energy Corp. (TSE:TNZ) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The analyst greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market may be pricing in some blue sky too, with the share price gaining 14% to CA$2.69 in the last 7 days. Could this upgrade be enough to drive the stock even higher?

Following the upgrade, the current consensus from Tenaz Energy's solo analyst is for revenues of CA$54m in 2022 which - if met - would reflect a sizeable 201% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to drop 13% to CA$0.39 in the same period. Prior to this update, the analyst had been forecasting revenues of CA$28m and earnings per share (EPS) of CA$0.26 in 2022. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.

View our latest analysis for Tenaz Energy

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. For example, we noticed that Tenaz Energy's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3x growth to the end of 2022 on an annualised basis. That is well above its historical decline of 2.7% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 1.2% annually. So it looks like Tenaz Energy is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations, it might be time to take another look at Tenaz Energy.

The covering analyst is clearly in love with Tenaz Energy at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as major dilution from new stock issuance in the past year. You can learn more, and discover the 2 other warning signs 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.