Analysts Are Updating Their TT Electronics plc (LON:TTG) Estimates After Its Interim Results

The half-year results for TT Electronics plc (LON:TTG) were released last week, making it a good time to revisit its performance. The result was fairly weak overall, with revenues of UK£238m being 4.9% less than what the analysts had been modelling. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Following last week's earnings report, TT Electronics' five analysts are forecasting 2025 revenues to be UK£495.0m, approximately in line with the last 12 months. Earnings are expected to improve, with TT Electronics forecast to report a statutory profit of UK£0.04 per share. Before this earnings report, the analysts had been forecasting revenues of UK£499.3m and earnings per share (EPS) of UK£0.12 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

View our latest analysis for TT Electronics

It might be a surprise to learn that the consensus price target was broadly unchanged at UK£1.11, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. There are some variant perceptions on TT Electronics, with the most bullish analyst valuing it at UK£1.40 and the most bearish at UK£0.95 per share. 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 TT Electronics' past performance and to peers in the same industry. We would highlight that TT Electronics' revenue growth is expected to slow, with the forecast 3.9% annualised growth rate until the end of 2025 being well below the historical 5.0% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.1% per year. Factoring in the forecast slowdown in growth, it seems obvious that TT Electronics is also expected to grow slower than other industry participants.

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 TT Electronics' 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.

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. We have estimates - from multiple TT Electronics analysts - going out to 2027, and you can see them free on our platform here.

It might also be worth considering whether TT Electronics' debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.