GATX Corporation (NYSE:GATX) Just Reported And Analysts Have Been Lifting Their Price Targets

It's been a good week for GATX Corporation (NYSE:GATX) shareholders, because the company has just released its latest full-year results, and the shares gained 8.3% to US$126. The result was positive overall - although revenues of US$1.4b were in line with what the analysts predicted, GATX surprised by delivering a statutory profit of US$7.12 per share, modestly greater than expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for GATX

After the latest results, the five analysts covering GATX are now predicting revenues of US$1.55b in 2024. If met, this would reflect a meaningful 9.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 3.4% to US$7.56. In the lead-up to this report, the analysts had been modelling revenues of US$1.51b and earnings per share (EPS) of US$6.96 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

It will come as no surprise to learn that the analysts have increased their price target for GATX 5.6% to US$137on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values GATX at US$148 per share, while the most bearish prices it at US$120. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting GATX 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. It's clear from the latest estimates that GATX's rate of growth is expected to accelerate meaningfully, with the forecast 9.8% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.7% p.a. 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 5.1% 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 here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards GATX following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for GATX going out to 2025, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for GATX (1 can't be ignored!) that you need to take into consideration.

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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.