ATCO Ltd. (TSE:ACO.X) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results look mixed - while revenue fell marginally short of analyst estimates at CA$4.7b, statutory earnings beat expectations 3.4%, with ATCO reporting profits of CA$3.82 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for ATCO

Taking into account the latest results, the most recent consensus for ATCO from six analysts is for revenues of CA$5.20b in 2024. If met, it would imply a solid 9.7% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be CA$3.91, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of CA$5.01b and earnings per share (EPS) of CA$3.65 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Despite these upgrades,the analysts have not made any major changes to their price target of CA$45.86, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values ATCO at CA$49.00 per share, while the most bearish prices it at CA$38.00. This is a very narrow spread of estimates, implying either that ATCO is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ATCO's past performance and to peers in the same industry. The analysts are definitely expecting ATCO's growth to accelerate, with the forecast 9.7% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.3% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect ATCO 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 ATCO 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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. At Simply Wall St, we have a full range of analyst estimates for ATCO going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for ATCO that you should be aware of.

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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.