Yahoo Finance LCI Industries Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
Investors in LCI Industries (NYSE:LCII) had a good week, as its shares rose 8.3% to close at US$116 following the release of its quarterly results. It looks like a credible result overall - although revenues of US$968m were what the analysts expected, LCI Industries surprised by delivering a (statutory) profit of US$1.44 per share, an impressive 175% above what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on LCI Industries after the latest results.
View our latest analysis for LCI Industries
Taking into account the latest results, the consensus forecast from LCI Industries' seven analysts is for revenues of US$4.01b in 2024. This reflects a modest 6.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 73% to US$6.35. Before this earnings report, the analysts had been forecasting revenues of US$4.09b and earnings per share (EPS) of US$5.55 in 2024. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the decent improvement in to the earnings per share numbers.
There's been no real change to the average price target of US$112, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic LCI Industries analyst has a price target of US$145 per share, while the most pessimistic values it at US$91.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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 LCI Industries' revenue growth is expected to slow, with the forecast 8.1% annualised growth rate until the end of 2024 being well below the historical 15% 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 11% annually. Factoring in the forecast slowdown in growth, it seems obvious that LCI Industries is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around LCI Industries' earnings potential next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at US$112, 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. At Simply Wall St, we have a full range of analyst estimates for LCI Industries going out to 2025, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for LCI Industries that you should be aware of.
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.
