Earnings Release: Here's Why Analysts Cut Their Tronox Holdings plc (NYSE:TROX) Price Target To US$12.33

Last week saw the newest yearly earnings release from Tronox Holdings plc (NYSE:TROX), an important milestone in the company's journey to build a stronger business. It was a pretty bad result overall; while revenues were in line with expectations at US$3.1b, statutory losses exploded to US$0.31 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Tronox Holdings after the latest results.

View our latest analysis for Tronox Holdings

Taking into account the latest results, the most recent consensus for Tronox Holdings from eight analysts is for revenues of US$3.17b in 2025. If met, it would imply a satisfactory 3.1% increase on its revenue over the past 12 months. Earnings are expected to improve, with Tronox Holdings forecast to report a statutory profit of US$0.47 per share. Before this earnings report, the analysts had been forecasting revenues of US$3.17b and earnings per share (EPS) of US$0.92 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

The average price target fell 14% to US$12.33, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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. The most optimistic Tronox Holdings analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$9.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Tronox Holdings shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Tronox Holdings' growth to accelerate, with the forecast 3.1% annualised growth to the end of 2025 ranking favourably alongside historical growth of 1.1% 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 4.4% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Tronox Holdings is expected to grow slower 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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 Tronox Holdings' future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Tronox Holdings going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Tronox Holdings .

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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.