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It's been a pretty great week for Green Plains Inc. (NASDAQ:GPRE) shareholders, with its shares surging 17% to US$37.78 in the week since its latest second-quarter results. It was overall a positive result, with revenues beating expectations by 3.9% to hit US$724m. Green Plains also reported a statutory profit of US$0.20, which was a nice improvement from the loss that the analysts were predicting. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Green Plains' eight analysts are now forecasting revenues of US$2.60b in 2021. This would be a decent 19% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 85% to US$0.31. Before this latest report, the consensus had been expecting revenues of US$2.53b and US$0.27 per share in losses. So it's pretty clear the analysts have mixed opinions on Green Plains even after this update; although they upped their revenue numbers, it came at the cost of a notable increase in per-share losses.
The average price target rose 11% to US$45.50, even thoughthe analysts have been updating their forecasts to show higher revenues and higher forecast losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Green Plains at US$46.00 per share, while the most bearish prices it at US$36.00. This is a very narrow spread of estimates, implying either that Green Plains is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Green Plains' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 42% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 12% a year 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 1.6% annually. Not only are Green Plains' 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 note is the forecast of increased losses next year, suggesting all may not be well at Green Plains. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Green Plains going out to 2023, and you can see them free on our platform here..
Plus, you should also learn about the 3 warning signs we've spotted with Green Plains .
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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