Tennant Company Just Missed Earnings - But Analysts Have Updated Their Models

Last week, you might have seen that Tennant Company (NYSE:TNC) released its third-quarter result to the market. The early response was not positive, with shares down 7.0% to US$74.46 in the past week. It looks like a pretty bad result, all things considered. Although revenues of US$303m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 29% to hit US$0.80 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the most recent consensus for Tennant from four analysts is for revenues of US$1.30b in 2026. If met, it would imply a reasonable 5.1% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 89% to US$5.70. In the lead-up to this report, the analysts had been modelling revenues of US$1.31b and earnings per share (EPS) of US$5.60 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for Tennant

The consensus price target fell 16% to US$109, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the quarterly results. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Tennant analyst has a price target of US$125 per share, while the most pessimistic values it at US$93.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Tennant is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Tennant's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Tennant's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 4.1% growth on an annualised basis. This is compared to a historical growth rate of 5.1% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.5% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Tennant.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Tennant's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Tennant's future valuation.

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 Tennant going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Tennant that we have uncovered.

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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.