New Forecasts: Here's What Analysts Think The Future Holds For TravelCenters of America Inc. (NASDAQ:TA)

Celebrations may be in order for TravelCenters of America Inc. (NASDAQ:TA) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

Following the upgrade, the most recent consensus for TravelCenters of America from its three analysts is for revenues of US$5.9b in 2021 which, if met, would be a sizeable 22% increase on its sales over the past 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of US$1.25 per share this year. Before this latest update, the analysts had been forecasting revenues of US$5.2b and earnings per share (EPS) of US$1.05 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for TravelCenters of America

As a result, it might be a surprise to see that the analysts have cut their price target 5.2% to US$36.75, which could suggest the forecast improvement in performance is not expected to last. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic TravelCenters of America analyst has a price target of US$40.00 per share, while the most pessimistic values it at US$32.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting TravelCenters of America is an easy business to forecast or the underlying assumptions are obvious.

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 TravelCenters of America's growth to accelerate, with the forecast 22% annualised growth to the end of 2021 ranking favourably alongside historical growth of 0.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect TravelCenters of America to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The declining price target is a puzzle, but still - with a serious upgrade to this year's expectations, it might be time to take another look at TravelCenters of America.

Analysts are definitely bullish on TravelCenters of America, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including major dilution from new stock issuance in the past year. For more information, you can click through to our platform to learn more about this and the 1 other concern we've identified .

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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