Analysts Have Been Trimming Their Talos Energy Inc. (NYSE:TALO) Price Target After Its Latest Report

Talos Energy Inc. (NYSE:TALO) investors will be delighted, with the company turning in some strong numbers with its latest results. Revenues and losses per share were both better than expected, with revenues of US$513m leading estimates by 3.0%. Statutory losses were smaller than the analystsexpected, coming in at US$0.05 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the nine analysts covering Talos Energy provided consensus estimates of US$1.85b revenue in 2025, which would reflect a definite 10% decline over the past 12 months. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -US$0.74 per share in 2025. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.81b and losses of US$0.93 per share in 2025. So it seems there's been a definite increase in optimism about Talos Energy's future following the latest consensus numbers, with a considerable decrease in the loss per share forecasts in particular.

Check out our latest analysis for Talos Energy

The consensus price target fell 7.3%, to US$12.90, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. 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 Talos Energy, with the most bullish analyst valuing it at US$20.00 and the most bearish at US$9.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 13% by the end of 2025. This indicates a significant reduction from annual growth of 20% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.7% annually for the foreseeable future. It's pretty clear that Talos Energy's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Talos Energy going out to 2027, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Talos Energy (of which 1 doesn't sit too well with us!) you should know about.

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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.