Yahoo Finance Leucrotta Exploration Inc. (CVE:LXE) Just Reported, And Analysts Assigned A CA$0.47 Price Target
It's been a good week for Leucrotta Exploration Inc. (CVE:LXE) shareholders, because the company has just released its latest annual results, and the shares gained 3.1% to CA$0.33. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 2.1%to hit CA$28m. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Leucrotta Exploration after the latest results.
See our latest analysis for Leucrotta Exploration
After the latest results, the consensus from Leucrotta Exploration's three analysts is for revenues of CA$18.1m in 2020, which would reflect a sizeable 36% decline in sales compared to the last year of performance. Per-share losses are expected to explode, reaching CA$0.05 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of CA$29.3m and losses of CA$0.06 per share in 2020. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.
The consensus price target fell 9.5% to CA$0.47, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Leucrotta Exploration analyst has a price target of CA$0.75 per share, while the most pessimistic values it at CA$0.30. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with the forecast 36% revenue decline a notable change from historical growth of 18% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 0.2% next year. So it's pretty clear that Leucrotta Exploration's revenues are expected to shrink faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Unfortunately they also downgraded their revenue estimates, and our analysts estimates suggest that Leucrotta Exploration is still expected to perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Leucrotta Exploration going out to 2021, and you can see them free on our platform here.
It is also worth noting that we have found 5 warning signs for Leucrotta Exploration (2 are potentially serious!) that you need to take into consideration.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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