Trent Limited Just Missed Earnings - But Analysts Have Updated Their Models

It's shaping up to be a tough period for Trent Limited (NSE:TRENT), which a week ago released some disappointing second-quarter results that could have a notable impact on how the market views the stock. Results look to have been somewhat negative - revenue fell 4.5% short of analyst estimates at ₹42b, and statutory earnings of ₹9.53 per share missed forecasts by 7.8%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Trent

Taking into account the latest results, the current consensus from Trent's eleven analysts is for revenues of ₹180.3b in 2025. This would reflect a decent 20% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 5.6% to ₹54.03. In the lead-up to this report, the analysts had been modelling revenues of ₹184.1b and earnings per share (EPS) of ₹52.57 in 2025. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

The consensus has made no major changes to the price target of ₹6,572, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Trent at ₹9,349 per share, while the most bearish prices it at ₹3,195. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Trent'shistorical trends, as the 44% annualised revenue growth to the end of 2025 is roughly in line with the 38% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 24% per year. So it's pretty clear that Trent is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Trent following these results. They also downgraded Trent's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, long term profitability is more important for the value creation process. 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 in mind, we wouldn't be too quick to come to a conclusion on Trent. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Trent going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for Trent 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.