Green Plains Inc. (NASDAQ:GPRE) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
Green Plains Inc. (NASDAQ:GPRE) missed earnings with its latest full-year results, disappointing overly-optimistic forecasters. The numbers were fairly weak, with revenue of US$3.3b missing analyst predictions by 2.9%, and (statutory) losses of US$1.59 per share being slightly larger than what the analysts had expected. 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.
View our latest analysis for Green Plains
After the latest results, the consensus from Green Plains' ten analysts is for revenues of US$2.79b in 2024, which would reflect a definite 15% decline in revenue compared to the last year of performance. Green Plains is also expected to turn profitable, with statutory earnings of US$1.17 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.08b and earnings per share (EPS) of US$1.29 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.
The analysts made no major changes to their price target of US$34.65, suggesting the downgrades are not expected to have a long-term impact on Green Plains' valuation. 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 Green Plains, with the most bullish analyst valuing it at US$55.00 and the most bearish at US$24.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 15% by the end of 2024. This indicates a significant reduction from annual growth of 9.9% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 0.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Green Plains is expected to lag 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. 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 held steady at US$34.65, with the latest estimates not enough to have an impact on their price targets.
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 Green Plains 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 1 warning sign with Green Plains , and understanding this should be part of your investment process.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
