Keyera Corp. (TSE:KEY) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. The result was positive overall - although revenues of CA$1.8b were in line with what the analysts predicted, Keyera surprised by delivering a statutory profit of CA$0.57 per share, modestly greater than expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following the recent earnings report, the consensus from six analysts covering Keyera is for revenues of CA$6.12b in 2025. This implies a considerable 17% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to shrink 8.5% to CA$2.18 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$6.43b and earnings per share (EPS) of CA$2.10 in 2025. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

Check out our latest analysis for Keyera

There's been no real change to the average price target of CA$46.23, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. 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. There are some variant perceptions on Keyera, with the most bullish analyst valuing it at CA$51.00 and the most bearish at CA$41.00 per share. This is a very narrow spread of estimates, implying either that Keyera is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 22% by the end of 2025. This indicates a significant reduction from annual growth of 18% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Keyera is expected to lag the wider industry.

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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 Keyera following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CA$46.23, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Keyera. Long-term earnings power is much more important than next year's profits. We have forecasts for Keyera going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted  1 warning sign for Keyera you should be aware of.

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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.