The analysts covering Teekay Tankers Ltd. (NYSE:TNK) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
After the downgrade, the consensus from Teekay Tankers' six analysts is for revenues of US$649m in 2025, which would reflect a painful 47% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to tumble 36% to US$7.48 in the same period. Prior to this update, the analysts had been forecasting revenues of US$743m and earnings per share (EPS) of US$7.44 in 2025. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a substantial drop in revenues and reconfirming their earnings per share estimates.
The average price target was steady at US$58.14 even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Teekay Tankers' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 47% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.5% per year. It's pretty clear that Teekay Tankers' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Teekay Tankers' revenues are expected to grow slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Teekay Tankers after today.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Teekay Tankers analysts - going out to 2027, and you can see them 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 downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.
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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.
