Earnings Update: Here's Why Analysts Just Lifted Their Toromont Industries Ltd. (TSE:TIH) Price Target To CA$135

Investors in Toromont Industries Ltd. (TSE:TIH) had a good week, as its shares rose 5.7% to close at CA$125 following the release of its yearly results. Toromont Industries reported CA$4.6b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CA$6.45 beat expectations, being 3.2% higher than what the analysts expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Toromont Industries

Following the latest results, Toromont Industries' eight analysts are now forecasting revenues of CA$4.80b in 2024. This would be a credible 3.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 3.0% to CA$6.62. Before this earnings report, the analysts had been forecasting revenues of CA$4.74b and earnings per share (EPS) of CA$6.33 in 2024. So the consensus seems to have become somewhat more optimistic on Toromont Industries' earnings potential following these results.

The consensus price target rose 6.4% to CA$135, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Toromont Industries, with the most bullish analyst valuing it at CA$142 and the most bearish at CA$125 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. It's pretty clear that there is an expectation that Toromont Industries' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.9% growth on an annualised basis. This is compared to a historical growth rate of 5.8% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.0% annually. So it's pretty clear that, while Toromont Industries' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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 Toromont Industries following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Toromont Industries analysts - going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.