Garrett Motion Inc. Just Beat EPS By 19%: Here's What Analysts Think Will Happen Next

As you might know, Garrett Motion Inc. (NASDAQ:GTX) just kicked off its latest third-quarter results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 4.1% to hit US$902m. Garrett Motion reported statutory earnings per share (EPS) US$0.38, which was a notable 19% above what the analysts had forecast. 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. 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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Taking into account the latest results, the current consensus from Garrett Motion's four analysts is for revenues of US$3.67b in 2026. This would reflect a reasonable 3.9% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 4.6% to US$1.75. In the lead-up to this report, the analysts had been modelling revenues of US$3.59b and earnings per share (EPS) of US$1.57 in 2026. So it seems there's been a definite increase in optimism about Garrett Motion's future following the latest results, with a nice increase in the earnings per share forecasts in particular.

Check out our latest analysis for Garrett Motion

It will come as no surprise to learn that the analysts have increased their price target for Garrett Motion 10% to US$18.75on the back of these upgrades. 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. Currently, the most bullish analyst values Garrett Motion at US$20.00 per share, while the most bearish prices it at US$17.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Garrett Motion is an easy business to forecast or the the analysts are all using similar assumptions.

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. The analysts are definitely expecting Garrett Motion's growth to accelerate, with the forecast 3.1% annualised growth to the end of 2026 ranking favourably alongside historical growth of 1.8% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Garrett Motion is expected to grow slower 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 Garrett Motion's earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Garrett Motion going out to 2027, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Garrett Motion (1 is significant) you should be aware of.

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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.