Lindsay Corporation (NYSE:LNN) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues of US$152m came up short as it was 12% below what the analysts had predicted. Profits didn't suffer quite so much, with statutory per-share earnings of US$1.64 being coming in 5.5% 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus, from the four analysts covering Lindsay, is for revenues of US$603.1m in 2024. This implies a discernible 6.4% reduction in Lindsay's revenue over the past 12 months. Statutory earnings per share are expected to descend 17% to US$5.21 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$672.7m and earnings per share (EPS) of US$5.87 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a real cut to earnings per share numbers as well.
The average price target climbed 9.8% to US$134despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Lindsay analyst has a price target of US$142 per share, while the most pessimistic values it at US$126. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Lindsay is an easy business to forecast or the the analysts are all using similar assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 12% annualised decline to the end of 2024. That is a notable change from historical growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Lindsay is expected to lag 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 Lindsay. On the negative side, they also downgraded their revenue estimates, and 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Lindsay going out to 2026, and you can see them free on our platform here.
We also provide an overview of the Lindsay Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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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.