Need To Know: Analysts Are Much More Bullish On Tidewater Midstream and Infrastructure Ltd. (TSE:TWM) Revenues

Tidewater Midstream and Infrastructure Ltd. (TSE:TWM) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that Tidewater Midstream and Infrastructure will make substantially more sales than they'd previously expected.

Following the upgrade, the consensus from four analysts covering Tidewater Midstream and Infrastructure is for revenues of CA$2.4b in 2023, implying an uncomfortable 11% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing CA$2.1b of revenue in 2023. It looks like there's been a clear increase in optimism around Tidewater Midstream and Infrastructure, given the nice gain to revenue forecasts.

Check out our latest analysis for Tidewater Midstream and Infrastructure

There was no particular change to the consensus price target of CA$1.62, with Tidewater Midstream and Infrastructure's latest outlook seemingly not enough to result in a change of valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Tidewater Midstream and Infrastructure, with the most bullish analyst valuing it at CA$1.80 and the most bearish at CA$1.35 per share. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 8.5% by the end of 2023. This indicates a significant reduction from annual growth of 47% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 1.2% annually for the foreseeable future. So it's pretty clear that Tidewater Midstream and Infrastructure's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for next year. They're also forecasting for revenues to shrink at a quicker rate than companies in the wider market. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at Tidewater Midstream and Infrastructure.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential warning signs with Tidewater Midstream and Infrastructure, including its declining profit margins. For more information, you can click through to our platform to learn more about this and the 3 other warning signs we've identified .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.