Yahoo Finance Earnings Update: Transurban Group (ASX:TCL) Just Reported Its Half-Yearly Results And Analysts Are Updating Their Forecasts
Shareholders might have noticed that Transurban Group (ASX:TCL) filed its half-yearly result this time last week. The early response was not positive, with shares down 4.7% to AU$13.05 in the past week. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 2.1%to hit AU$1.4b. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Transurban Group after the latest results.
See our latest analysis for Transurban Group
After the latest results, the nine analysts covering Transurban Group are now predicting revenues of AU$3.37b in 2021. If met, this would reflect a credible 4.7% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 81% to AU$0.042. Yet prior to the latest earnings, the analysts had been forecasting revenues of AU$3.41b and losses of AU$0.0011 per share in 2021. So it's pretty clear the analysts have mixed opinions on Transurban Group even after this update; although they reconfirmed their revenue numbers, it came at the cost of a massive increase in per-share losses.
As a result, there was no major change to the consensus price target of AU$14.27, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. 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 Transurban Group analyst has a price target of AU$16.84 per share, while the most pessimistic values it at AU$12.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. It's pretty clear that there is an expectation that Transurban Group's revenue growth will slow down substantially, with revenues next year expected to grow 4.7%, compared to a historical growth rate of 12% over the past five years. Compare this to the 6 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.5% per year. Factoring in the forecast slowdown in growth, it looks like Transurban Group is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at AU$14.27, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Transurban Group analysts - going out to 2024, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Transurban Group , and understanding these should be part of your investment process.
This article by Simply Wall St is general in nature. 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.
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