Here's What Analysts Are Forecasting For Rotork plc (LON:ROR) After Its Full-Year Results
It's been a good week for Rotork plc (LON:ROR) shareholders, because the company has just released its latest full-year results, and the shares gained 4.9% to UK£3.24. Rotork reported in line with analyst predictions, delivering revenues of UK£719m and statutory earnings per share of UK£0.13, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 Rotork
Taking into account the latest results, the most recent consensus for Rotork from 17 analysts is for revenues of UK£752.1m in 2024. If met, it would imply a modest 4.6% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 4.5% to UK£0.14. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£758.5m and earnings per share (EPS) of UK£0.15 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at UK£3.52, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. Currently, the most bullish analyst values Rotork at UK£4.15 per share, while the most bearish prices it at UK£3.00. 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.
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. One thing stands out from these estimates, which is that Rotork is forecast to grow faster in the future than it has in the past, with revenues expected to display 4.6% annualised growth until the end of 2024. If achieved, this would be a much better result than the 0.4% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.7% per year. So while Rotork's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Rotork analysts - going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Rotork .
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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.
