Shareholders in Keyera Corp. (TSE:KEY) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Keyera will make substantially more sales than they'd previously expected.
Following the upgrade, the most recent consensus for Keyera from its four analysts is for revenues of CA$6.7b in 2022 which, if met, would be a satisfactory 3.3% increase on its sales over the past 12 months. Statutory earnings per share are supposed to reduce 4.2% to CA$1.94 in the same period. Previously, the analysts had been modelling revenues of CA$6.0b and earnings per share (EPS) of CA$1.77 in 2022. The most recent forecasts are noticeably more optimistic, with a decent improvement in revenue estimates and a lift to earnings per share as well.
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$36.35, suggesting that the forecast performance does not have a long term impact on the company's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Keyera analyst has a price target of CA$39.00 per share, while the most pessimistic values it at CA$30.00. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 6.7% growth on an annualised basis. That is in line with its 7.1% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 0.8% annually. So although Keyera is expected to maintain its revenue growth rate, it's definitely expected to grow faster than 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 this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Keyera.
Analysts are clearly in love with Keyera at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as the risk of cutting its dividend. You can learn more, and discover the 1 other warning sign we've identified, for free on our platform here.
We also provide an overview of the Keyera Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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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.
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