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It's shaping up to be a tough period for Transat A.T. Inc. (TSE:TRZ), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. Revenues missed expectations somewhat, coming in at CA$785m, but statutory earnings fell catastrophically short, with a loss of CA$1.58 some 114% larger than what the analysts had predicted. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Transat A.T
After the latest results, the five analysts covering Transat A.T are now predicting revenues of CA$3.38b in 2024. If met, this would reflect an okay 6.7% improvement in revenue compared to the last 12 months. The statutory loss per share is expected to greatly reduce in the near future, narrowing 54% to CA$1.10. Before this earnings report, the analysts had been forecasting revenues of CA$3.55b and earnings per share (EPS) of CA$0.60 in 2024. There looks to have been a significant drop in sentiment regarding Transat A.T's prospects after these latest results, with a small dip in revenues and the analysts now forecasting a loss instead of a profit.
The average price target fell 15% to CA$3.58, implicitly signalling that lower earnings per share are a leading indicator for Transat A.T's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Transat A.T, with the most bullish analyst valuing it at CA$5.50 and the most bearish at CA$2.50 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that Transat A.T is forecast to grow faster in the future than it has in the past, with revenues expected to display 9.0% annualised growth until the end of 2024. If achieved, this would be a much better result than the 4.0% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.9% per year. So it looks like Transat A.T is expected to grow faster than its competitors, at least for a while.