Party Time: Brokers Just Made Major Increases To Their Teekay Tankers Ltd. (NYSE:TNK) Earnings Forecasts

Celebrations may be in order for Teekay Tankers Ltd. (NYSE:TNK) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market seems to be pricing in some improvement in the business too, with the stock up 6.1% over the past week, closing at US$62.55. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the latest upgrade, the five analysts covering Teekay Tankers provided consensus estimates of US$840m revenue in 2024, which would reflect a substantial 41% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to decline 13% to US$14.06 in the same period. Prior to this update, the analysts had been forecasting revenues of US$757m and earnings per share (EPS) of US$11.56 in 2024. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Teekay Tankers

It will come as no surprise to learn that the analysts have increased their price target for Teekay Tankers 8.2% to US$71.86 on the back of these upgrades.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 34% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 7.0% 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 0.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Teekay Tankers is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for next year. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Teekay Tankers could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Teekay Tankers analysts - going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.