Analysts Have Been Trimming Their Caesarstone Ltd. (NASDAQ:CSTE) Price Target After Its Latest Report

It's been a good week for Caesarstone Ltd. (NASDAQ:CSTE) shareholders, because the company has just released its latest full-year results, and the shares gained 8.1% to US$4.12. Revenues were in line with expectations, at US$565m, while statutory losses ballooned to US$3.13 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Caesarstone

Taking into account the latest results, the current consensus, from the two analysts covering Caesarstone, is for revenues of US$529.6m in 2024. This implies a small 6.3% reduction in Caesarstone's revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 88% to US$0.39. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$507.1m and losses of US$0.67 per share in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a very favorable reduction to loss per share in particular.

Yet despite these upgrades, the analysts cut their price target 8.3% to US$5.50, implicitly signalling that the ongoing losses are likely to weigh negatively on Caesarstone's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 6.3% by the end of 2024. This indicates a significant reduction from annual growth of 4.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.2% annually for the foreseeable future. It's pretty clear that Caesarstone's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Caesarstone going out as far as 2025, and you can see them free on our platform here.

We also provide an overview of the Caesarstone Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.