Last week, you might have seen that Landstar System, Inc. (NASDAQ:LSTR) released its full-year result to the market. The early response was not positive, with shares down 2.7% to US$111 in the past week. It looks like the results were a bit of a negative overall. While revenues of US$4.1b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.5% to hit US$5.72 per share. 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, Landstar System's 13 analysts currently expect revenues in 2020 to be US$4.07b, approximately in line with the last 12 months. Statutory earnings per share are expected to dip 3.4% to US$5.53 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of US$4.08b and earnings per share (EPS) of US$6.02 in 2020. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but analysts did make a small dip in their earnings per share forecasts.
The consensus price target held steady at US$111, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Landstar System at US$136 per share, while the most bearish prices it at US$85.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. We would highlight that sales are expected to reverse, with the forecast 0.4% revenue decline a notable change from historical growth of 8.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 6.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Landstar System to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will 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 forecasts for Landstar System going out to 2022, and you can see them free on our platform here.
We also provide an overview of the Landstar System Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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