Tidewater Midstream and Infrastructure Ltd. (TSE:TWM) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year’s forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company’s business prospects.
Following this upgrade, Tidewater Midstream and Infrastructure’s four analysts are forecasting 2022 revenues to be CA$2.4b, approximately in line with the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CA$1.9b in 2022. The consensus has definitely become more optimistic, showing a considerable lift to revenue forecasts.
We’d point out that there was no major changes to their price target of CA$1.85, suggesting the latest estimates were not enough to shift their view on the value of the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. There are some variant perceptions on Tidewater Midstream and Infrastructure, with the most bullish analyst valuing it at CA$2.10 and the most bearish at CA$1.75 per share. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Tidewater Midstream and Infrastructure’s revenue growth is expected to slow, with the forecast 2.0% annualised growth rate until the end of 2022 being well below the historical 47% p.a. growth over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 0.2% per year. So it’s clear that despite the slowdown in growth, Tidewater Midstream and Infrastructure is still expected to grow meaningfully faster than the wider industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Tidewater Midstream and Infrastructure this year. They’re also forecasting for revenues to perform better than companies in the wider market. Seeing the dramatic upgrade to this year’s forecasts, it might be time to take another look at Tidewater Midstream and Infrastructure.
Analysts are definitely bullish on Tidewater Midstream and Infrastructure, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. You can learn more, and discover the 3 other flags we’ve identified, for free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks 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.
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