Yahoo Finance Tronox Holdings plc Just Released Its Yearly Results And Analysts Are Updating Their Estimates
There's been a major selloff in Tronox Holdings plc (NYSE:TROX) shares in the week since it released its annual report, with the stock down 26% to US$7.15. It was a respectable set of results; while revenues of US$2.6b were in line with analyst predictions, statutory losses were 11% smaller than expected, with Tronox Holdings losing US$0.78 per share. Following the result, 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 analysts are expecting for next year.
Check out our latest analysis for Tronox Holdings
Taking into account the latest results, the latest consensus from Tronox Holdings's six analysts is for revenues of US$3.05b in 2020, which would reflect a solid 15% improvement in sales compared to the last 12 months. Tronox Holdings is also expected to turn profitable, with statutory earnings of US$0.88 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of US$3.11b and earnings per share (EPS) of US$1.05 in 2020. Analysts seem less optimistic after the recent results, reducing their sales forecasts and making a real cut to earnings per share forecasts.
Analysts made no major changes to their price target of US$14.04, suggesting the downgrades are not expected to have a long-term impact on Tronox Holdings's valuation. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. The most optimistic Tronox Holdings analyst has a price target of US$20.00 per share, while the most pessimistic values it at US$7.25. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. Analysts are definitely expecting Tronox Holdings's growth to accelerate, with the forecast 15% growth ranking favourably alongside historical growth of 5.2% 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 3.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Tronox Holdings is expected to grow much faster than its market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Tronox Holdings. Unfortunately analysts also downgraded their revenue estimates, although industry data suggests that Tronox Holdings's revenues are expected to grow faster than the wider market. The consensus price target held steady at US$14.04, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Still, 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 Tronox Holdings going out to 2022, and you can see them free on our platform here..
You can also see whether Tronox Holdings is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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