New Forecasts: Here's What One Analyst Thinks The Future Holds For TGS ASA (OB:TGS)

Shareholders in TGS ASA (OB:TGS) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. The revenue forecast for this year has experienced a facelift, with the analyst now much more optimistic on its sales pipeline.

Following the upgrade, the current consensus from TGS' sole analyst is for revenues of US$1.4b in 2024 which - if met - would reflect a sizeable 83% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 619% to US$0.97. Before this latest update, the analyst had been forecasting revenues of US$992m and earnings per share (EPS) of US$0.90 in 2024. The most recent forecasts are noticeably more optimistic, with a very substantial lift in revenue estimates and a lift to earnings per share as well.

See our latest analysis for TGS

Despite these upgrades, the analyst has not made any major changes to their price target of US$15.07, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 TGS at US$23.05 per share, while the most bearish prices it at US$11.47. This is a fairly broad spread of estimates, suggesting that the analyst is forecasting a wide range of possible outcomes for the business.

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. The analyst is definitely expecting TGS' growth to accelerate, with the forecast 234% annualised growth to the end of 2024 ranking favourably alongside historical growth of 10% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that TGS is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the analyst appears to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at TGS.

The covering analyst is clearly in love with TGS at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as its declining profit margins. For more information, you can click through to our platform to learn more about this and the 2 other warning signs 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 with high insider ownership.

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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.

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