There's been a major selloff in Avantor, Inc. (NYSE:AVTR) shares in the week since it released its third-quarter report, with the stock down 23% to US$11.82. Things were not great overall, with a surprise (statutory) loss of US$1.04 per share on revenues of US$1.6b, even though the analysts had been expecting a profit. 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 last week's earnings report, Avantor's 16 analysts are forecasting 2026 revenues to be US$6.58b, approximately in line with the last 12 months. Earnings are expected to improve, with Avantor forecast to report a statutory profit of US$0.55 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$6.77b and earnings per share (EPS) of US$0.64 in 2026. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The consensus price target fell 6.1% to US$13.80, with the weaker earnings outlook clearly leading valuation estimates. 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. Currently, the most bullish analyst values Avantor at US$19.00 per share, while the most bearish prices it at US$12.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2026. That would be a definite improvement, given that the past five years have seen revenue shrink 0.5% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.0% annually. So it's pretty clear that, although revenues are improving, Avantor is still expected to grow slower than the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Avantor's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Avantor. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Avantor analysts - going out to 2027, and you can see them free on our platform here.

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.