Lancaster Colony Corporation (NASDAQ:LANC) came out with its second-quarter results last week, and we wanted to see how the business is performing and what top analysts think of the company following this report. Lancaster Colony missed revenue estimates by 2.8%, with sales of US$355m, although statutory earnings per share (EPS) of US$1.58 beat expectations, coming in 3.8% ahead of analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, Lancaster Colony's two analysts currently expect revenues in 2020 to be US$1.34b, approximately in line with the last 12 months. Statutory per share are forecast to be US$5.32, approximately in line with the last 12 months. Before this earnings report, analysts had been forecasting revenues of US$1.37b and earnings per share (EPS) of US$5.38 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$165, suggesting that the company has met expectations in its recent result.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. It's pretty clear that analysts expect Lancaster Colony's revenue growth will slow down substantially, with revenues next year expected to grow 0.4%, compared to a historical growth rate of 3.8% over the past five years. Compare this against other companies (with analyst forecasts) in the market, which are in aggregate expected to see revenue growth of 2.9% next year. So it's pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than Lancaster Colony.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Lancaster Colony's revenues are expected to perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Lancaster Colony going out as far as 2021, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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