TORM plc Just Recorded A 31% Revenue Beat: Here's What Analysts Think
As you might know, TORM plc (CPH:TRMD A) recently reported its second-quarter numbers. Revenue of US$663m beat expectations by an impressive 31%, while statutory earnings per share (EPS) were US$3.25, in line with estimates. 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.
Following the recent earnings report, the consensus from five analysts covering TORM is for revenues of US$1.61b in 2026. This implies an uneasy 8.5% decline in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 26% to US$7.67. Before this earnings report, the analysts had been forecasting revenues of US$1.45b and earnings per share (EPS) of US$7.51 in 2026. Sentiment certainly seems to have improved after the latest results, with a solid increase in revenue and a slight bump in earnings per share estimates.
See our latest analysis for TORM
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of kr.213, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values TORM at kr.255 per share, while the most bearish prices it at kr.138. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 16% annualised decline to the end of 2026. That is a notable change from historical growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 1.2% annually for the foreseeable future. The forecasts do look bearish for TORM, since they're expecting it to shrink faster than the industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around TORM's earnings potential next year. They also upgraded their estimates, with revenue apparently performing well, although it is expected to lag the wider industry this year. The consensus price target held steady at kr.213, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for TORM going out to 2028, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for TORM (1 is concerning) you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.