It's been a good week for Lifetime Brands, Inc. (NASDAQ:LCUT) shareholders, because the company has just released its latest quarterly results, and the shares gained 8.3% to US$15.71. In addition to smashing expectations with revenues of US$196m, Lifetime Brands delivered a surprise statutory profit of US$0.14 per share, a notable improvement compared to analyst expectations of a loss. 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.
After the latest results, the dual analysts covering Lifetime Brands are now predicting revenues of US$849.5m in 2021. If met, this would reflect an okay 3.6% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to reduce 4.2% to US$1.30 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$792.5m and earnings per share (EPS) of US$1.05 in 2021. So it seems there's been a definite increase in optimism about Lifetime Brands' future following the latest results, with a massive increase in the earnings per share forecasts in particular.
It will come as no surprise to learn that the analysts have increased their price target for Lifetime Brands 11% to US$20.50on the back of these upgrades.
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. We would highlight that Lifetime Brands' revenue growth is expected to slow, with the forecast 4.9% annualised growth rate until the end of 2021 being well below the historical 7.3% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.1% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Lifetime Brands.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Lifetime Brands' earnings potential next year. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Lifetime Brands (1 is concerning) you should be aware 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.