New Forecasts: Here's What Analysts Think The Future Holds For Saturn Oil & Gas Inc. (CVE:SOIL)

Saturn Oil & Gas Inc. (CVE:SOIL) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The revenue forecast for next year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. Investor sentiment seems to be improving too, with the share price up 6.6% to CA$3.08 over the past 7 days. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the latest consensus from Saturn Oil & Gas' twin analysts is for revenues of CA$253m in 2022, which would reflect a major 357% improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of CA$0.45 per share next year. Previously, the analysts had been modelling revenues of CA$206m and earnings per share (EPS) of CA$0.45 in 2022. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

Check out our latest analysis for Saturn Oil & Gas

Even though revenue forecasts increased, there was no change to the consensus price target of CA$10.81, suggesting the analysts are focused on earnings as the driver of value creation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Saturn Oil & Gas analyst has a price target of CA$13.12 per share, while the most pessimistic values it at CA$8.50. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Saturn Oil & Gas' rate of growth is expected to accelerate meaningfully, with the forecast 237% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 62% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Saturn Oil & Gas to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at Saturn Oil & Gas.

Analysts are clearly in love with Saturn Oil & Gas at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as major dilution from new stock issuance in the past year. For more information, you can click through to our platform to learn more about this and the 1 other warning sign we've identified .

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading 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.