TORM plc Beat Revenue Forecasts By 16%: Here's What Analysts Are Forecasting Next

Last week saw the newest yearly earnings release from TORM plc (CPH:TRMD A), an important milestone in the company's journey to build a stronger business. TORM beat revenue forecasts by a solid 16% to hit US$1.5b. Statutory earnings per share came in at US$7.48, in line with expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on TORM after the latest results.

See our latest analysis for TORM

Following the recent earnings report, the consensus from five analysts covering TORM is for revenues of US$1.29b in 2024. This implies an uneasy 15% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to decrease 2.8% to US$6.98 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.17b and earnings per share (EPS) of US$7.16 in 2024. Although revenue sentiment looks to be improving, the analysts have made a small dip in per-share earnings estimates, perhaps acknowledging the investment required to grow the business.

There's been no major changes to the price target of kr.267, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' 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. Currently, the most bullish analyst values TORM at kr.273 per share, while the most bearish prices it at kr.260. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the TORM's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 15% by the end of 2024. This indicates a significant reduction from annual growth of 21% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 2.1% annually for the foreseeable future. The forecasts do look bearish for TORM, since they're expecting it to shrink faster than the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for TORM. They also upgraded their estimates, with revenue apparently performing well, although it is expected to lag the wider industry this year. 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 forecasts for TORM going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 4 warning signs for TORM (1 is significant!) that you need to be mindful of.

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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.