Last Update 28 Nov 25
LNN: Future Performance Will Rely On Buybacks Amid Market Uncertainty
Analysts have lowered Lindsay's price target by $14 to $122, citing ongoing challenges in domestic irrigation markets, a recent earnings miss, and tough year-over-year comparisons for the company's international and infrastructure segments.
Analyst Commentary
Following the recent performance report, analysts have provided both optimistic and cautious perspectives regarding Lindsay's outlook and valuation. Their commentary highlights several factors influencing their current sentiment on the company.
Bullish Takeaways
- Bullish analysts note that the company achieved a top-line revenue beat, reflecting resilience in demand for its core products.
- Growth opportunities remain present in international irrigation, particularly in regions with expanding agricultural infrastructure.
- Ongoing projects in the Infrastructure segment, despite challenging comparisons ahead, may provide a basis for long-term growth beyond the upcoming fiscal year.
Bearish Takeaways
- Bearish analysts are concerned about persistent weakness in domestic irrigation markets, which could weigh on near-term profitability.
- The recent earnings miss on EPS highlights execution challenges and margin pressure, potentially limiting valuation upside.
- Comparisons for international and infrastructure operations are expected to be difficult in FY26 because of unusually strong results from large-scale projects in FY25.
- Execution risk is elevated, especially if the market does not recover as anticipated or if new project pipelines slow.
What's in the News
- Lindsay Corporation (NYSE:LNN) has announced a new share repurchase program to buy back up to $150 million of common stock with no expiration date. (Company announcement)
- Between September 1, 2025 and November 3, 2025, the company repurchased 224,420 shares for $29.81 million. This brings total repurchases since January 2014 to 2,888,941 shares, representing 24.7% of shares outstanding for $250 million. (Buyback update)
- The Board of Directors authorized a new buyback plan on November 3, 2025. (Company board disclosure)
- Sam Hinrichsen has been appointed as the next Chief Financial Officer, effective January 1, 2026. He will succeed Brian Ketcham upon his retirement at the end of 2025. (Executive announcement)
Valuation Changes
- Fair Value Estimate: Remains unchanged at $127 per share, reflecting analyst consensus on intrinsic value.
- Discount Rate: Has risen slightly from 8.56% to 8.59%, which indicates a minor perceived increase in investment risk or cost of capital.
- Revenue Growth: Essentially unchanged, holding steady at approximately 4.29% projected annual growth.
- Net Profit Margin: Remains stable at 11.69%, suggesting expectations for profitability have not shifted.
- Future P/E Ratio: Edged up marginally from 18.12x to 18.13x, which points to a barely higher valuation level applied to future earnings.
Key Takeaways
- Strategic supply chain management and tariff actions help Lindsay maintain margins amid global uncertainties, supporting continued revenue and operating income growth.
- Growth in international markets and new product launches enhance Lindsay's revenue potential, while liquidity supports strategic investments for long-term shareholder value.
- Rising interest rates, tariffs, and infrastructure project timing uncertainties could challenge Lindsay's revenue growth and earnings stability across international and domestic markets.
Catalysts
About Lindsay- Provides water management and road infrastructure products and services in the United States and internationally.
- The completion of large Road Zipper projects and a strong sales pipeline for future projects suggest continued revenue growth in the infrastructure segment. This aligns with expectations for increased operating income and margin improvements due to a favorable revenue mix.
- The growth in international irrigation markets, particularly in MENA and Brazil, driven by large projects and improved commodity prices, positions Lindsay for sustained revenue growth in these regions, even as North American demand remains stable.
- The approval and launch of new safety products, such as the TAU-XR Xpress Repair Crash Cushion, can enhance product offerings and drive higher-margin revenues in the infrastructure sector.
- Strategic supply chain initiatives and potential tariff-related pricing actions indicate an ability to manage cost pressures, helping to maintain or improve net margins despite global economic uncertainties.
- The ample liquidity and strong balance sheet, combined with capital allocation strategies, suggest potential for strategic investments or acquisitions that could enhance earnings and shareholder value over the long term.
Lindsay Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming Lindsay's revenue will grow by 3.5% annually over the next 3 years.
- Analysts assume that profit margins will increase from 11.2% today to 11.5% in 3 years time.
- Analysts expect earnings to reach $86.5 million (and earnings per share of $7.88) by about September 2028, up from $76.0 million today.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 22.4x on those 2028 earnings, up from 19.7x today. This future PE is lower than the current PE for the US Machinery industry at 24.7x.
- Analysts expect the number of shares outstanding to grow by 0.14% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 8.13%, as per the Simply Wall St company report.
Lindsay Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- Rising interest rates and a more challenging credit environment in Brazil may temper demand for Lindsay's products, potentially impacting international revenue growth.
- The uncertainty around the timing of large infrastructure projects, such as Road Zipper, makes it difficult to predict future revenue streams, thereby impacting earnings stability.
- The North American irrigation market is not expected to see significant improvement in market conditions in the near term, potentially leading to stagnation or decline in domestic revenues.
- Potential tariff impacts, including on goods sourced from Taiwan and Korea, and rising steel prices due to tariff uncertainties, could increase cost of goods sold, affecting net margins if not fully passed through to customers.
- Retaliatory tariffs affecting U.S. agricultural exports could negatively impact the demand from U.S. farmers for irrigation equipment, possibly reducing domestic revenues and overall earnings.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $153.0 for Lindsay based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $170.0, and the most bearish reporting a price target of just $136.0.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $751.5 million, earnings will come to $86.5 million, and it would be trading on a PE ratio of 22.4x, assuming you use a discount rate of 8.1%.
- Given the current share price of $138.1, the analyst price target of $153.0 is 9.7% higher.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
How well do narratives help inform your perspective?
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.