Travis Perkins plc Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Shareholders might have noticed that Travis Perkins plc (LON:TPK) filed its full-year result this time last week. The early response was not positive, with shares down 4.5% to UK£7.03 in the past week. Statutory earnings per share fell badly short of expectations, coming in at UK£0.18, some 57% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at UK£4.9b. 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.

View our latest analysis for Travis Perkins

Taking into account the latest results, Travis Perkins' 16 analysts currently expect revenues in 2024 to be UK£4.78b, approximately in line with the last 12 months. Per-share earnings are expected to soar 104% to UK£0.37. Before this earnings report, the analysts had been forecasting revenues of UK£4.83b and earnings per share (EPS) of UK£0.48 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

The consensus price target held steady at UK£8.14, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Travis Perkins at UK£9.50 per share, while the most bearish prices it at UK£6.10. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would also point out that the forecast 1.6% annualised revenue decline to the end of 2024 is better than the historical trend, which saw revenues shrink 9.1% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 2.2% annually. So while a broad number of companies are forecast to grow, unfortunately Travis Perkins is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Travis Perkins' revenue is 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.

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 Travis Perkins analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Travis Perkins that we have uncovered.

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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.