Analysts Are Upgrading Transat A.T. Inc. (TSE:TRZ) After Its Latest Results

Shareholders might have noticed that Transat A.T. Inc. (TSE:TRZ) filed its yearly result this time last week. The early response was not positive, with shares down 2.5% to CA$3.53 in the past week. It looks like the results were pretty good overall. While revenues of CA$3.0b were in line with analyst predictions, statutory losses were much smaller than expected, with Transat A.T losing CA$0.66 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Transat A.T after the latest results.

Check out our latest analysis for Transat A.T

Following the latest results, Transat A.T's five analysts are now forecasting revenues of CA$3.48b in 2024. This would be a notable 14% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Transat A.T forecast to report a statutory profit of CA$0.07 per share. Before this latest report, the consensus had been expecting revenues of CA$3.21b and CA$0.63 per share in losses. So we can see there's been a pretty clear upgrade to expectations following the latest results, with a slight bump in revenues expected to lead to profitability earlier than previously forecast.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$4.05, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. The most optimistic Transat A.T analyst has a price target of CA$5.75 per share, while the most pessimistic values it at CA$3.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Transat A.T's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 14% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 11% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 8.8% per year. So it looks like Transat A.T is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting Transat A.T to become profitable 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 CA$4.05, with the latest estimates not enough to have an impact on their price targets.

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 Transat A.T analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Transat A.T has 1 warning sign we think 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.