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Last week saw the newest quarterly earnings release from International Petroleum Corporation (TSE:IPCO), an important milestone in the company's journey to build a stronger business. Results look mixed - while revenue fell marginally short of analyst estimates at US$219m, statutory earnings beat expectations 9.8%, with International Petroleum reporting profits of US$0.36 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on International Petroleum after the latest results.
Check out our latest analysis for International Petroleum
Taking into account the latest results, the consensus forecast from International Petroleum's five analysts is for revenues of US$919.2m in 2024. This reflects a reasonable 4.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to drop 11% to US$1.32 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$903.0m and earnings per share (EPS) of US$1.26 in 2024. So the consensus seems to have become somewhat more optimistic on International Petroleum's earnings potential following these results.
There's been no major changes to the consensus price target of CA$20.31, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic International Petroleum analyst has a price target of CA$20.93 per share, while the most pessimistic values it at CA$18.44. This is a very narrow spread of estimates, implying either that International Petroleum is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that International Petroleum's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 8.8% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.9% per year. Even after the forecast slowdown in growth, it seems obvious that International Petroleum is also expected to grow faster than the wider industry.