The Andersons, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
The Andersons, Inc. (NASDAQ:ANDE) shareholders are probably feeling a little disappointed, since its shares fell 4.7% to US$52.04 in the week after its latest full-year results. Revenues US$15b disappointed slightly, at6.6% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of US$2.94 coming in 16% above what was anticipated. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Andersons
Taking into account the latest results, the current consensus, from the three analysts covering Andersons, is for revenues of US$13.9b in 2024. This implies a perceptible 5.7% reduction in Andersons' revenue over the past 12 months. Statutory earnings per share are expected to decline 16% to US$2.55 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$15.4b and earnings per share (EPS) of US$3.89 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.
What's most unexpected is that the consensus price target rose 11% to US$68.33, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. 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 Andersons analyst has a price target of US$70.00 per share, while the most pessimistic values it at US$65.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 5.7% by the end of 2024. This indicates a significant reduction from annual growth of 26% 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 4.4% per year. It's pretty clear that Andersons' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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 estimates - from multiple Andersons analysts - going out to 2025, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Andersons 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.
