Earnings Update: Here's Why Analysts Just Lifted Their Tomra Systems ASA (OB:TOM) Price Target To kr171

It's been a pretty great week for Tomra Systems ASA (OB:TOM) shareholders, with its shares surging 12% to kr187 in the week since its latest full-year results. Tomra Systems reported €1.3b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of €0.32 beat expectations, being 4.1% higher than what the analysts expected. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Tomra Systems

Taking into account the latest results, the current consensus from Tomra Systems' six analysts is for revenues of €1.47b in 2025. This would reflect a notable 9.3% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 34% to €0.42. In the lead-up to this report, the analysts had been modelling revenues of €1.47b and earnings per share (EPS) of €0.42 in 2025. 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.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 6.9% to kr171. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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. There are some variant perceptions on Tomra Systems, with the most bullish analyst valuing it at kr220 and the most bearish at kr120 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 9.3% growth on an annualised basis. That is in line with its 8.6% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 12% annually. So it's pretty clear that Tomra Systems is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 forecasts for Tomra Systems going out to 2027, and you can see them free on our platform here.

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

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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.