Yahoo Finance LKQ Corporation (NASDAQ:LKQ) Just Released Its Yearly Earnings: Here's What Analysts Think
Investors in LKQ Corporation (NASDAQ:LKQ) had a good week, as its shares rose 4.3% to close at US$52.18 following the release of its yearly results. It was a credible result overall, with revenues of US$14b and statutory earnings per share of US$3.49 both in line with analyst estimates, showing that LKQ is executing in line with expectations. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for LKQ
After the latest results, the eleven analysts covering LKQ are now predicting revenues of US$15.3b in 2024. If met, this would reflect a notable 10% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 5.9% to US$3.74. In the lead-up to this report, the analysts had been modelling revenues of US$15.2b and earnings per share (EPS) of US$3.85 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
The consensus price target held steady at US$61.10, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on LKQ, with the most bullish analyst valuing it at US$68.00 and the most bearish at US$51.00 per share. This is a very narrow spread of estimates, implying either that LKQ is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the LKQ's past performance and to peers in the same industry. The analysts are definitely expecting LKQ's growth to accelerate, with the forecast 10% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect LKQ to grow faster than 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 LKQ. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for LKQ going out to 2026, 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 LKQ , and understanding these should be part of your investment process.
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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.