Investors in Otter Tail Corporation (NASDAQ:OTTR) had a good week, as its shares rose 5.1% to close at US$82.49 following the release of its quarterly results. Revenues of US$338m came up short as it was 10% below what the analysts had predicted. Profits didn't suffer quite so much, with statutory per-share earnings of US$2.03 being coming in 6.0% above what was forecast. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Otter Tail

Taking into account the latest results, Otter Tail's three analysts currently expect revenues in 2025 to be US$1.36b, approximately in line with the last 12 months. Statutory earnings per share are forecast to tumble 23% to US$5.63 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.46b and earnings per share (EPS) of US$4.62 in 2025. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the great increase in to the earnings per share numbers.

The average price target increased 16% to US$81.00, with the analysts signalling that the improved earnings outlook is more important to the company's valuation than its revenue.

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 pretty clear that there is an expectation that Otter Tail's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.1% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.7% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Otter Tail.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Otter Tail following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Otter Tail. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Otter Tail analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Otter Tail (of which 1 is significant!) you should know about.

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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.