Analysts Just Shipped A Substantial Upgrade To Their LSI Industries Inc. (NASDAQ:LYTS) Estimates
Shareholders in LSI Industries Inc. (NASDAQ:LYTS) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market seems to be pricing in some improvement in the business too, with the stock up 8.8% over the past week, closing at US$8.98. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
Following the upgrade, the current consensus from LSI Industries' twin analysts is for revenues of US$355m in 2022 which - if met - would reflect a sizeable 26% increase on its sales over the past 12 months. Statutory earnings per share are presumed to shoot up 72% to US$0.47. Before this latest update, the analysts had been forecasting revenues of US$320m and earnings per share (EPS) of US$0.38 in 2022. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
View our latest analysis for LSI Industries
With these upgrades, we're not surprised to see that the analysts have lifted their price target 8.0% to US$13.50 per share. 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. Currently, the most bullish analyst values LSI Industries at US$14.00 per share, while the most bearish prices it at US$11.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that LSI Industries is forecast to grow faster in the future than it has in the past, with revenues expected to display 20% annualised growth until the end of 2022. If achieved, this would be a much better result than the 2.0% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 10% annually. Not only are LSI Industries' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for next year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, LSI Industries could be worth investigating further.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for LSI Industries going out as far as 2025, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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. 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.
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