Last week, you might have seen that GATX Corporation (NYSE:GATX) released its quarterly result to the market. The early response was not positive, with shares down 6.0% to US$136 in the past week. Statutory earnings per share fell badly short of expectations, coming in at US$1.21, some 32% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$387m. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

After the latest results, the two analysts covering GATX are now predicting revenues of US$1.55b in 2024. If met, this would reflect a modest 3.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 14% to US$7.42. Before this earnings report, the analysts had been forecasting revenues of US$1.56b and earnings per share (EPS) of US$7.66 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at US$135, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that GATX's rate of growth is expected to accelerate meaningfully, with the forecast 7.1% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.6% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect GATX to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for GATX. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$135, with the latest estimates not enough to have an impact on their price targets.

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 analyst estimates for GATX going out as far as 2025, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for GATX (1 is potentially serious!) that you need to take into consideration.

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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.

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