Analysts Have Made A Financial Statement On Treatt plc's (LON:TET) Interim Report
Shareholders of Treatt plc (LON:TET) will be pleased this week, given that the stock price is up 11% to UK£7.15 following its latest half-yearly results. It was a credible result overall, with revenues of UK£76m and statutory earnings per share of UK£0.22 both in line with analyst estimates, showing that Treatt is executing in line with expectations. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Treatt
Taking into account the latest results, the most recent consensus for Treatt from eight analysts is for revenues of UK£155.0m in 2023 which, if met, would be a satisfactory 3.5% increase on its sales over the past 12 months. Statutory earnings per share are predicted to swell 16% to UK£0.20. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£154.2m and earnings per share (EPS) of UK£0.20 in 2023. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of UK£7.44, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Treatt at UK£8.80 per share, while the most bearish prices it at UK£6.30. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Treatt'shistorical trends, as the 7.0% annualised revenue growth to the end of 2023 is roughly in line with the 6.1% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 2.2% annually. So although Treatt is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at UK£7.44, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Treatt going out to 2025, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Treatt that we have uncovered.
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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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