Results: TGS ASA Exceeded Expectations And The Consensus Has Updated Its Estimates

TGS ASA (OB:TGS) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.6% to hit US$224m. TGS also reported a statutory profit of US$0.27, which was an impressive 100% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for TGS

After the latest results, the five analysts covering TGS are now predicting revenues of US$984.6m in 2024. If met, this would reflect a sizeable 24% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 639% to US$1.00. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$992.1m and earnings per share (EPS) of US$0.90 in 2024. Although the revenue estimates have not really changed, we can see there's been a decent improvement in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target was unchanged at kr165, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values TGS at kr252 per share, while the most bearish prices it at kr125. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the TGS' past performance and to peers in the same industry. The analysts are definitely expecting TGS' growth to accelerate, with the forecast 55% 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 5.5% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect TGS to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around TGS' earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at kr165, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple TGS analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 4 warning signs for TGS (2 make us uncomfortable!) that you should be aware of.

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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.

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