Tourmaline Oil Corp. (TSE:TOU) Analysts Just Slashed This Year's Estimates

One thing we could say about the analysts on Tourmaline Oil Corp. (TSE:TOU) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the current consensus, from the four analysts covering Tourmaline Oil, is for revenues of CA$6.4b in 2023, which would reflect an uneasy 9.6% reduction in Tourmaline Oil's sales over the past 12 months. Statutory earnings per share are supposed to tumble 60% to CA$5.23 in the same period. Before this latest update, the analysts had been forecasting revenues of CA$7.9b and earnings per share (EPS) of CA$6.30 in 2023. Indeed, we can see that the analysts are a lot more bearish about Tourmaline Oil's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Tourmaline Oil

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 13% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 36% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 0.03% per year. The forecasts do look bearish for Tourmaline Oil, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that Tourmaline Oil revenue is expected to perform worse than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Tourmaline Oil, and a few readers might choose to steer clear of the stock.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Tourmaline Oil going out to 2024, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks 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.