Analysts Just Made A Major Revision To Their LARK Distilling Co. Ltd. (ASX:LRK) Revenue Forecasts

Market forces rained on the parade of LARK Distilling Co. Ltd. (ASX:LRK) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the current consensus, from the twin analysts covering LARK Distilling, is for revenues of AU$21m in 2023, which would reflect a considerable 12% reduction in LARK Distilling's sales over the past 12 months. Before the latest update, the analysts were foreseeing AU$24m of revenue in 2023. The consensus view seems to have become more pessimistic on LARK Distilling, noting the substantial drop in revenue estimates in this update.

View our latest analysis for LARK Distilling

There was no particular change to the consensus price target of AU$3.07, with LARK Distilling's latest outlook seemingly not enough to result in a change of valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values LARK Distilling at AU$4.30 per share, while the most bearish prices it at AU$1.83. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 23% by the end of 2023. This indicates a significant reduction from annual growth of 50% 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 2.4% per year. It's pretty clear that LARK Distilling's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for LARK Distilling this year. They also expect company revenue to perform worse than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of LARK Distilling going forwards.

Thirsting for more data? We have estimates for LARK Distilling from its twin analysts out until 2025, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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.