GATX Corporation (NYSE:GATX) Released Earnings Last Week And Analysts Lifted Their Price Target To US$137
Investors in GATX Corporation (NYSE:GATX) had a good week, as its shares rose 8.3% to close at US$126 following the release of its annual results. GATX reported US$1.4b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$7.12 beat expectations, being 2.4% higher than what the analysts expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for GATX
Taking into account the latest results, the current consensus from GATX's five analysts is for revenues of US$1.55b in 2024. This would reflect a meaningful 9.8% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 3.4% to US$7.56. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.51b and earnings per share (EPS) of US$6.96 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.6% to US$137per share. 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 GATX, with the most bullish analyst valuing it at US$148 and the most bearish at US$120 per share. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the GATX's past performance and to peers in the same industry. The analysts are definitely expecting GATX's growth to accelerate, with the forecast 9.8% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.7% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that GATX is expected to grow much faster than its 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 GATX following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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 GATX going out to 2025, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 3 warning signs for GATX (1 is a bit unpleasant!) that you need to be mindful 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.
