Tennant Company Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
As you might know, Tennant Company (NYSE:TNC) just kicked off its latest third-quarter results with some very strong numbers. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 10% higher than the analysts had forecast, at US$262m, while EPS were US$0.63 beating analyst models by 226%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Tennant
Taking into account the latest results, the most recent consensus for Tennant from three analysts is for revenues of US$1.07b in 2021 which, if met, would be a credible 4.8% increase on its sales over the past 12 months. Per-share earnings are expected to increase 9.0% to US$2.51. Before this earnings report, the analysts had been forecasting revenues of US$1.07b and earnings per share (EPS) of US$2.52 in 2021. 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.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$68.00. 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 Tennant, with the most bullish analyst valuing it at US$73.00 and the most bearish at US$63.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Tennant is an easy business to forecast or the the analysts are all using similar assumptions.
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 would highlight that Tennant's revenue growth is expected to slow, with forecast 4.8% increase next year well below the historical 7.9%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that Tennant is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Tennant's revenues are expected to perform worse than the wider 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.
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. At Simply Wall St, we have a full range of analyst estimates for Tennant going out to 2024, 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 Tennant that we have uncovered.
This article by Simply Wall St is general in nature. 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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