CA$135 - That's What Analysts Think Toromont Industries Ltd. (TSE:TIH) Is Worth After These Results
Investors in Toromont Industries Ltd. (TSE:TIH) had a good week, as its shares rose 5.7% to close at CA$125 following the release of its annual results. The result was positive overall - although revenues of CA$4.6b were in line with what the analysts predicted, Toromont Industries surprised by delivering a statutory profit of CA$6.45 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Toromont Industries after the latest results.
See our latest analysis for Toromont Industries
Following the latest results, Toromont Industries' eight analysts are now forecasting revenues of CA$4.80b in 2024. This would be a modest 3.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 3.0% to CA$6.62. Before this earnings report, the analysts had been forecasting revenues of CA$4.74b and earnings per share (EPS) of CA$6.33 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target rose 6.4% to CA$135, suggesting that higher earnings estimates flow through to the stock's valuation as well. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Toromont Industries analyst has a price target of CA$142 per share, while the most pessimistic values it at CA$125. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Toromont Industries' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.9% growth on an annualised basis. This is compared to a historical growth rate of 5.8% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.0% annually. So it's pretty clear that, while Toromont Industries' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
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 Toromont Industries following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Toromont Industries analysts - going out to 2026, and you can see them free on our platform here.
You can also see our analysis of Toromont Industries' Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.
