Tomra Systems ASA Just Missed EPS By 6.8%: Here's What Analysts Think Will Happen Next

Shareholders will be ecstatic, with their stake up 28% over the past week following Tomra Systems ASA's (OB:TOM) latest yearly results. Tomra Systems beat revenue expectations by 4.2%, at kr15b. Statutory earnings per share (EPS) came in at kr2.36, some 6.8% short of analyst estimates. 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.

Check out our latest analysis for Tomra Systems

Taking into account the latest results, Tomra Systems' six analysts currently expect revenues in 2024 to be kr14.5b, approximately in line with the last 12 months. Statutory earnings per share are predicted to leap 65% to kr3.89. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr14.2b and earnings per share (EPS) of kr3.43 in 2024. So it seems there's been a definite increase in optimism about Tomra Systems' future following the latest results, with a substantial gain in the earnings per share forecasts in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of kr93.75, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. There are some variant perceptions on Tomra Systems, with the most bullish analyst valuing it at kr121 and the most bearish at kr75.00 per share. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 1.8% annualised decline to the end of 2024. That is a notable change from historical growth of 10% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% per year. It's pretty clear that Tomra Systems' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Tomra Systems' earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at kr93.75, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Tomra Systems. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Tomra Systems analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Tomra Systems (1 is potentially serious!) that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.