It's been a pretty great week for Lindsay Corporation (NYSE:LNN) shareholders, with its shares surging 12% to US$93.72 in the week since its latest third-quarter results. The result was positive overall - although revenues of US$123m were in line with what the analysts predicted, Lindsay surprised by delivering a statutory profit of US$0.93 per share, modestly greater than expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Lindsay after the latest results.
Taking into account the latest results, the five analysts covering Lindsay provided consensus estimates of US$436.3m revenue in 2021, which would reflect a small 2.6% decline on its sales over the past 12 months. Statutory per-share earnings are expected to be US$2.33, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$438.4m and earnings per share (EPS) of US$2.46 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$92.25, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Lindsay, with the most bullish analyst valuing it at US$100.00 and the most bearish at US$82.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 2.6% revenue decline is better than the historical trend, which saw revenues shrink 3.8% annually over the past five years
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 plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$92.25, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Lindsay. Long-term earnings power is much more important than next year's profits. We have forecasts for Lindsay going out to 2024, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Lindsay that you need to be mindful of.
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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