It's been a good week for LCI Industries (NYSE:LCII) shareholders, because the company has just released its latest quarterly results, and the shares gained 8.3% to US$116. Revenues were US$968m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$1.44, an impressive 175% 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from LCI Industries' seven analysts is for revenues of US$4.01b in 2024. This would reflect a modest 6.0% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 73% to US$6.35. In the lead-up to this report, the analysts had been modelling revenues of US$4.09b and earnings per share (EPS) of US$5.55 in 2024. Although the analysts have lowered their revenue forecasts, they've also made a solid gain to their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.
There's been no real change to the average price target of US$112, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. 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 LCI Industries analyst has a price target of US$145 per share, while the most pessimistic values it at US$91.00. 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 LCI Industries shareholders.
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 LCI Industries' revenue growth is expected to slow, with the forecast 8.1% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than LCI Industries.
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 LCI Industries following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Yet - earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$112, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple LCI Industries analysts - going out to 2025, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with LCI Industries , and understanding them should be part of your investment process.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.