Total Energy Services Inc. (TSE:TOT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.
Following the upgrade, the most recent consensus for Total Energy Services from its three analysts is for revenues of CA$629m in 2022 which, if met, would be a substantial 46% increase on its sales over the past 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of CA$0.12 per share this year. Before this latest update, the analysts had been forecasting revenues of CA$570m and earnings per share (EPS) of CA$0.10 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.9% to CA$9.69 per share. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Total Energy Services analyst has a price target of CA$12.25 per share, while the most pessimistic values it at CA$8.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. For example, we noticed that Total Energy Services' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 46% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 1.8% 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 3.4% annually. So it looks like Total Energy Services is expected to grow faster than its competitors, at least for a while.
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. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Total Energy Services could be worth investigating further.
Still, 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 Total Energy Services going out to 2024, and you can see them 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.