Analysts Just Shaved Their Touchstone Exploration Inc. (TSE:TXP) Forecasts Dramatically

The analysts covering Touchstone Exploration Inc. (TSE:TXP) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After the downgrade, the three analysts covering Touchstone Exploration are now predicting revenues of US$41m in 2022. If met, this would reflect a sizeable 60% improvement in sales compared to the last 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of US$0.0072 per share in 2022. Previously, the analysts had been modelling revenues of US$48m and earnings per share (EPS) of US$0.016 in 2022. So we can see that the consensus has become notably more bearish on Touchstone Exploration's outlook with these numbers, making a substantial drop in this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

Check out our latest analysis for Touchstone Exploration

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Touchstone Exploration's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Touchstone Exploration is forecast to grow faster in the future than it has in the past, with revenues expected to display 156% annualised growth until the end of 2022. If achieved, this would be a much better result than the 1.5% annual decline 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 0.9% annually. So it looks like Touchstone Exploration is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest low-light for us was that the forecasts for Touchstone Exploration dropped from profits to a loss this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Touchstone Exploration, and a few readers might choose to steer clear of the stock.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Touchstone Exploration going out to 2023, 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.