A week ago, Toromont Industries Ltd. (TSE:TIH) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. The company beat expectations with revenues of CA$1.7b arriving 8.4% ahead of forecasts. Statutory earnings per share (EPS) were CA$2.33, 9.4% ahead of estimates. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for Toromont Industries from eight analysts is for revenues of CA$6.70b in 2027. If met, it would imply a notable 14% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 35% to CA$9.37. Before this earnings report, the analysts had been forecasting revenues of CA$6.62b and earnings per share (EPS) of CA$9.25 in 2027. 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.
Check out our latest analysis for Toromont Industries
The analysts reconfirmed their price target of CA$247, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Toromont Industries analyst has a price target of CA$265 per share, while the most pessimistic values it at CA$192. This is a very narrow spread of estimates, implying either that Toromont Industries 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 Toromont Industries' past performance and to peers in the same industry. It's clear from the latest estimates that Toromont Industries' rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 8.1% p.a. 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 8.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Toromont Industries is expected to grow much faster than its industry.
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. Happily, there were no major changes to revenue forecasts, with the business still 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.
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 forecasts for Toromont Industries going out to 2028, and you can see them free on our platform here.
We also provide an overview of the Toromont Industries Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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