Yahoo Finance LSB Industries, Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
It's been a good week for LSB Industries, Inc. (NYSE:LXU) shareholders, because the company has just released its latest full-year results, and the shares gained 3.4% to US$7.54. Statutory earnings per share fell badly short of expectations, coming in at US$0.37, some 25% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$594m. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for LSB Industries
Following the recent earnings report, the consensus from eight analysts covering LSB Industries is for revenues of US$527.3m in 2024. This implies an uneasy 11% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to dip 5.7% to US$0.36 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$539.7m and earnings per share (EPS) of US$0.57 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.
The consensus price target fell 10% to US$10.78, with the weaker earnings outlook clearly leading valuation estimates. 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 LSB Industries, with the most bullish analyst valuing it at US$23.00 and the most bearish at US$7.75 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 11% by the end of 2024. This indicates a significant reduction from annual growth of 20% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.5% per year. It's pretty clear that LSB Industries' revenues are expected to perform substantially worse 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 LSB Industries. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of LSB Industries' future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for LSB Industries going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for LSB Industries (1 can't be ignored) you should be aware of.
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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.