Today is shaping up negative for Gran Tierra Energy Inc. (NYSEMKT:GTE) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
After this downgrade, Gran Tierra Energy's four analysts are now forecasting revenues of US$465m in 2021. This would be a sizeable 95% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$552m of revenue in 2021. The consensus view seems to have become more pessimistic on Gran Tierra Energy, noting the substantial drop in revenue estimates in this update.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Gran Tierra Energy's growth to accelerate, with the forecast 95% annualised growth to the end of 2021 ranking favourably alongside historical growth of 9.9% 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 8.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Gran Tierra Energy to grow faster than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Gran Tierra Energy this year. They're also forecasting more rapid revenue growth than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Gran Tierra Energy after today.
Of course, this isn't the full story. We have estimates for Gran Tierra Energy from its four analysts out until 2025, and you can see them free on our platform here.
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