GATX Corporation Just Missed EPS By 32%: Here's What Analysts Think Will Happen Next

GATX Corporation (NYSE:GATX) shareholders are probably feeling a little disappointed, since its shares fell 6.0% to US$136 in the week after its latest quarterly results. Statutory earnings per share fell badly short of expectations, coming in at US$1.21, some 32% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$387m. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for GATX

Taking into account the latest results, the most recent consensus for GATX from dual analysts is for revenues of US$1.55b in 2024. If met, it would imply a satisfactory 3.5% increase on its revenue over the past 12 months. Per-share earnings are expected to swell 14% to US$7.42. Before this earnings report, the analysts had been forecasting revenues of US$1.56b and earnings per share (EPS) of US$7.66 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$135, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.

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 analysts are definitely expecting GATX's growth to accelerate, with the forecast 7.1% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.3% 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 5.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect GATX to grow faster than the wider industry.

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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$135, 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 GATX. Long-term earnings power is much more important than next year's profits. We have analyst estimates for GATX going out as far as 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - GATX has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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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.

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