Investors in UL Solutions Inc. (NYSE:ULS) had a good week, as its shares rose 9.9% to close at US$99.41 following the release of its first-quarter results. Revenues were US$758m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.45, an impressive 21% ahead of estimates. 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.

After the latest results, the twelve analysts covering UL Solutions are now predicting revenues of US$3.22b in 2026. If met, this would reflect an okay 3.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 21% to US$2.11. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.20b and earnings per share (EPS) of US$2.02 in 2026. So the consensus seems to have become somewhat more optimistic on UL Solutions' earnings potential following these results.

The consensus price target rose 15% to US$107, suggesting that higher earnings estimates flow through to the stock's valuation as well. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic UL Solutions analyst has a price target of US$120 per share, while the most pessimistic values it at US$78.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await UL Solutions shareholders.

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. We would highlight that UL Solutions' revenue growth is expected to slow, with the forecast 4.8% annualised growth rate until the end of 2026 being well below the historical 6.8% p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.6% 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 UL Solutions.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around UL Solutions' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. 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 UL Solutions. Long-term earnings power is much more important than next year's profits. We have forecasts for UL Solutions going out to 2028, and you can see them free on our platform here.

You can also see whether UL Solutions is carrying too much debt, and whether its balance sheet is healthy, for 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.