- Canada
- /
- Oil and Gas
- /
- TSX:IMO
Imperial Oil Limited (TSE:IMO) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CA$12b, statutory earnings missed forecasts by 19%, coming in at just CA$1.94 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Imperial Oil's seven analysts is for revenues of CA$58.4b in 2026. This would reflect a huge 25% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 134% to CA$14.11. In the lead-up to this report, the analysts had been modelling revenues of CA$57.9b and earnings per share (EPS) of CA$12.15 in 2026. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the solid gain to earnings per share expectations following these results.
See our latest analysis for Imperial Oil
There's been no major changes to the consensus price target of CA$150, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Imperial Oil, with the most bullish analyst valuing it at CA$212 and the most bearish at CA$120 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Imperial Oil's past performance and to peers in the same industry. It's clear from the latest estimates that Imperial Oil's rate of growth is expected to accelerate meaningfully, with the forecast 34% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 6.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.0% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Imperial Oil to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Imperial Oil following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at CA$150, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Imperial Oil analysts - going out to 2028, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Imperial Oil that you should be aware of.
New: AI Stock Screener & Alerts
Our new AI Stock Screener scans the market every day to uncover opportunities.
• Dividend Powerhouses (3%+ Yield)
• Undervalued Small Caps with Insider Buying
• High growth Tech and AI Companies
Or build your own from over 50 metrics.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Druckenmiller says cheap money's days are numbered. Boring, self-funding companies could be the opportunity.
Leverage on its own is close to useless as a screen right now, because so much corporate debt was termed out at 2 to 3% and has not repriced. A business at three times leverage with nothing due until 2031 is in a completely different position from the same ratio rolling next year. Screen on weighted average maturity and the schedule behind it.
In my view, Insurance companies are best positioned for this.
Which payment stocks actually get paid?
About TSX:IMO
Imperial Oil
Engages in exploration, production, and sale of crude oil and natural gas in Canada.
Flawless balance sheet established dividend payer.