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Tennant Company Just Released Its Full-Year Earnings: Here's What Analysts Think

Last week saw the newest yearly earnings release from Tennant Company (NYSE:TNC), an important milestone in the company's journey to build a stronger business. Tennant reported in line with analyst predictions, delivering revenues of US$1.1b and statutory earnings per share of US$2.48, suggesting the business is executing well and in line with its plan. 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. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Tennant

NYSE:TNC Past and Future Earnings, February 25th 2020
NYSE:TNC Past and Future Earnings, February 25th 2020

Following last week's earnings report, Tennant's four analysts are forecasting 2020 revenues to be US$1.16b, approximately in line with the last 12 months. Statutory earnings per share are expected to surge 24% to US$3.15. In the lead-up to this report, analysts had been modelling revenues of US$1.16b and earnings per share (EPS) of US$3.03 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at US$88.67, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Tennant analyst has a price target of US$95.00 per share, while the most pessimistic values it at US$77.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.

Further, we can compare these estimates to past performance, and see how Tennant forecasts compare to the wider market's forecast performance. We would highlight that Tennant's revenue growth is expected to slow, with forecast 1.9% increase next year well below the historical 8.9%p.a. growth over the last five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.0% next year. Factoring in the forecast slowdown in growth, it looks like analysts are expecting Tennant to grow at about the same rate as the wider market.

The Bottom Line

The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Tennant following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Tennant analysts - going out to 2024, and you can see them free on our platform here.

You can also see whether Tennant 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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