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Otter Tail Corporation (NASDAQ:OTTR) last week reported its latest annual results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results were roughly in line with estimates, with revenues of US$1.3b and statutory earnings per share of US$7.17. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Otter Tail
Taking into account the latest results, the current consensus from Otter Tail's twin analysts is for revenues of US$1.36b in 2025. This would reflect a credible 2.6% increase on its revenue over the past 12 months. Statutory earnings per share are expected to sink 14% to US$6.22 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.35b and earnings per share (EPS) of US$5.62 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the decent improvement in earnings per share expectations following these results.
The consensus price target was unchanged at US$82.00, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders.
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. We would highlight that Otter Tail's revenue growth is expected to slow, with the forecast 2.6% annualised growth rate until the end of 2025 being well below the historical 10% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Otter Tail is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Otter Tail's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Otter Tail's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$82.00, with the latest estimates not enough to have an impact on their price targets.