A week ago, Louisiana-Pacific Corporation (NYSE:LPX) came out with a strong set of second-quarter numbers that could potentially lead to a re-rate of the stock. Louisiana-Pacific beat earnings, with revenues hitting US$814m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 15%. 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. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Louisiana-Pacific
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Following last week’s earnings report, Louisiana-Pacific’s eleven analysts are forecasting 2024 revenues to be US$2.88b, approximately in line with the last 12 months. Statutory earnings per share are forecast to descend 19% to US$5.13 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.90b and earnings per share (EPS) of US$5.45 in 2024. 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 the analysts did make a small dip in their earnings per share forecasts.
Despite cutting their earnings forecasts,the analysts have lifted their price target 6.0% to US$99.30, suggesting that these impacts are not expected to weigh on the stock’s value in the long term. 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. There are some variant perceptions on Louisiana-Pacific, with the most bullish analyst valuing it at US$138 and the most bearish at US$65.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Louisiana-Pacific’s past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.3% by the end of 2024. This indicates a significant reduction from annual growth of 4.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – Louisiana-Pacific is expected to lag the wider industry.
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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 they will perform worse 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.
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. We have estimates – from multiple Louisiana-Pacific analysts – going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we’ve spotted 1 warning sign for Louisiana-Pacific you should know about.
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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.
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Publish date : 2024-08-10 03:42:00
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