Topaz Energy Corp. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

By
Simply Wall St
Published
March 19, 2021
TSX:TPZ
Source: Shutterstock

It's been a good week for Topaz Energy Corp. (TSE:TPZ) shareholders, because the company has just released its latest yearly results, and the shares gained 2.2% to CA$14.59. Revenues of CA$85m missed forecasts by 12%, but Topaz Energy managed to deliver a surprise (statutory) profit, with earnings per share of CA$0.03 a decent improvement on the loss that the analysts were predicting. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Topaz Energy

earnings-and-revenue-growth
TSX:TPZ Earnings and Revenue Growth March 20th 2021

After the latest results, the seven analysts covering Topaz Energy are now predicting revenues of CA$138.0m in 2021. If met, this would reflect a major 62% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to surge 288% to CA$0.19. Before this earnings report, the analysts had been forecasting revenues of CA$132.0m and earnings per share (EPS) of CA$0.18 in 2021. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$18.17, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. Currently, the most bullish analyst values Topaz Energy at CA$20.50 per share, while the most bearish prices it at CA$15.50. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Topaz Energy is an easy business to forecast or the the analysts are all using similar assumptions.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Topaz Energy following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at CA$18.17, with the latest estimates not enough to have an impact on their price targets.

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 Topaz Energy going out to 2022, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Topaz Energy that you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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