Earnings Miss: Traton SE Missed EPS By 5.5% And Analysts Are Revising Their Forecasts
The investors in Traton SE's (ETR:8TRA) will be rubbing their hands together with glee today, after the share price leapt 27% to €30.98 in the week following its full-year results. It looks like the results were a bit of a negative overall. While revenues of €47b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.5% to hit €4.90 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 Traton
Following the recent earnings report, the consensus from 13 analysts covering Traton is for revenues of €45.6b in 2024. This implies a discernible 2.7% decline in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 3.7% to €5.08. Before this earnings report, the analysts had been forecasting revenues of €44.0b and earnings per share (EPS) of €4.67 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 13% to €29.98per share. 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. There are some variant perceptions on Traton, with the most bullish analyst valuing it at €50.00 and the most bearish at €19.80 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.7% by the end of 2024. This indicates a significant reduction from annual growth of 14% 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 3.5% per year. It's pretty clear that Traton's revenues are expected to perform substantially worse 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 Traton following these results. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 forecasts for Traton going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Traton has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.
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.
