Nutrien Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

It's been a good week for Nutrien Ltd. (TSE:NTR) shareholders, because the company has just released its latest yearly results, and the shares gained 7.5% to CA$73.01. It looks like a pretty bad result, all things considered. Although revenues of US$28b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 27% to hit US$2.53 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Nutrien after the latest results.

View our latest analysis for Nutrien

Taking into account the latest results, the current consensus, from the 13 analysts covering Nutrien, is for revenues of US$26.4b in 2024. This implies a perceptible 6.1% reduction in Nutrien's revenue over the past 12 months. Statutory earnings per share are predicted to soar 75% to US$4.46. In the lead-up to this report, the analysts had been modelling revenues of US$27.3b and earnings per share (EPS) of US$4.64 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

Despite the cuts to forecast earnings, there was no real change to the CA$86.86 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Nutrien analyst has a price target of CA$106 per share, while the most pessimistic values it at CA$64.56. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 revenue is expected to reverse, with a forecast 6.1% annualised decline to the end of 2024. That is a notable change from historical growth of 15% 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 1.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Nutrien is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Nutrien. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CA$86.86, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Nutrien analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 4 warning signs for Nutrien that you need to be mindful of.

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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.