Texas Pacific Land Corporation (NYSE:TPL) just released its latest first-quarter report and things are not looking great. Texas Pacific Land missed analyst forecasts, with revenues of US$147m and statutory earnings per share (EPS) of US$12.64, falling short by 5.7% and 8.3% respectively. 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.
After the latest results, the twin analysts covering Texas Pacific Land are now predicting revenues of US$629.2m in 2022. If met, this would reflect a huge 22% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 35% to US$55.61. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$680.1m and earnings per share (EPS) of US$60.61 in 2022. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the US$1,513 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.
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 analysts are definitely expecting Texas Pacific Land's growth to accelerate, with the forecast 31% annualised growth to the end of 2022 ranking favourably alongside historical growth of 20% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 2.9% per year. It seems obvious that as part of the brighter growth outlook, Texas Pacific Land is expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$1,513, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for Texas Pacific Land you should know about.
Valuation is complex, but we're helping make it simple.
Find out whether Texas Pacific Land is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.