Analysts Have Made A Financial Statement On Treatt plc's (LON:TET) Yearly Report

By
Simply Wall St
Published
December 02, 2021
LSE:TET
Source: Shutterstock

Last week, you might have seen that Treatt plc (LON:TET) released its yearly result to the market. The early response was not positive, with shares down 6.5% to UK£10.85 in the past week. The result was positive overall - although revenues of UK£124m were in line with what the analysts predicted, Treatt surprised by delivering a statutory profit of UK£0.25 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Treatt

earnings-and-revenue-growth
LSE:TET Earnings and Revenue Growth December 3rd 2021

Taking into account the latest results, the most recent consensus for Treatt from four analysts is for revenues of UK£131.1m in 2022 which, if met, would be a credible 5.4% increase on its sales over the past 12 months. Per-share earnings are expected to rise 6.3% to UK£0.27. Before this earnings report, the analysts had been forecasting revenues of UK£131.1m and earnings per share (EPS) of UK£0.27 in 2022. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of UK£12.89, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Treatt, with the most bullish analyst valuing it at UK£14.00 and the most bearish at UK£12.08 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Treatt's past performance and to peers in the same industry. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 5.4% growth on an annualised basis. That is in line with its 4.8% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 4.9% per year. So although Treatt is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Treatt going out to 2024, and you can see them free on our platform here..

Plus, you should also learn about the 1 warning sign we've spotted with Treatt .

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