Earnings Miss: Transurban Group Missed EPS By 11% And Analysts Are Revising Their Forecasts

Transurban Group (ASX:TCL) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was not a great result overall. While revenues of AU$4.1b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 11% to hit AU$0.11 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Transurban Group

Taking into account the latest results, the consensus forecast from Transurban Group's ten analysts is for revenues of AU$4.55b in 2025. This reflects a notable 10% improvement in revenue compared to the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of AU$4.25b and earnings per share (EPS) of AU$0.16 in 2025. What's really interesting is that while the consensus made a small increase to revenue estimates, it no longer provides an earnings per share estimate. This suggests that revenues are now the focus of the business after this latest result.

We'd also point out that thatthe analysts have made no major changes to their price target of AU$13.01. 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 Transurban Group at AU$14.60 per share, while the most bearish prices it at AU$10.03. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Transurban Group's growth to accelerate, with the forecast 10% annualised growth to the end of 2025 ranking favourably alongside historical growth of 4.4% 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 6.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Transurban Group to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts upgraded their revenue estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at AU$13.01, with the latest estimates not enough to have an impact on their price targets.

We have estimates for Transurban Group from its ten analysts out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Transurban Group that you should be aware of.

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.