It's been a pretty great week for Techtronic Industries Company Limited (HKG:669) shareholders, with its shares surging 14% to HK$94.40 in the week since its latest annual results. Techtronic Industries reported in line with analyst predictions, delivering revenues of US$14b and statutory earnings per share of US$0.53, suggesting the business is executing well and in line with its plan. 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 Techtronic Industries after the latest results.
After the latest results, the 15 analysts covering Techtronic Industries are now predicting revenues of US$14.7b in 2024. If met, this would reflect a reasonable 6.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 17% to US$0.62. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$14.5b and earnings per share (EPS) of US$0.61 in 2024. 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.
The consensus price target rose 8.5% to HK$110despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Techtronic Industries' earnings by assigning a price premium. 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 Techtronic Industries at HK$120 per share, while the most bearish prices it at HK$89.22. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Techtronic Industries' revenue growth is expected to slow, with the forecast 6.8% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Techtronic Industries.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Techtronic Industries' revenue is expected to perform worse 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. At Simply Wall St, we have a full range of analyst estimates for Techtronic Industries going out to 2026, and you can see them free on our platform here..
You can also view our analysis of Techtronic Industries' balance sheet, and whether we think Techtronic Industries is carrying too much debt, for free on our platform here.
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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.