Lindsay (LNN): Exploring Valuation After Mixed Quarterly Results and North American Headwinds

Lindsay (LNN) just released its latest quarterly results, showing revenue slightly ahead of what many had expected, but earnings fell short. Management pointed to softer commodity prices and muted storm demand as factors dragging down performance, especially in North America.

See our latest analysis for Lindsay.

Lindsay has seen its share price stumble recently, with a 21.7% drop over the past month and a 17.5% decline in the last quarter. The one-year total shareholder return sits at -7.0%, reflecting investor concern despite ongoing dividend payments and long-term profitability. This suggests momentum is clearly fading following this stretch of weaker results and headline volatility.

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With shares down sharply, but annual growth in both revenue and profit still intact, investors must ask if Lindsay is trading at a discount to fair value, or if the market is now accurately reflecting its future prospects.

Most Popular Narrative: 13.3% Undervalued

Lindsay shares last closed at $110.10, noticeably below the narrative’s estimated fair value of $127. This sets up a valuation gap that could attract investors seeking mispriced industrial names.

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 among analysts, with the most bullish reporting a price target of $170.0, and the most bearish reporting a price target of just $136.0.

Read the complete narrative.

Want to know what’s fueling this narrative? The main factors are upward projections for revenue and profit margins, along with a forward price multiple typically reserved for much faster-growing firms. If you are interested in the full list of assumptions and what analysts believe Lindsay could look like in a few short years, click through to see the expectations driving this attention-grabbing fair value number.

Result: Fair Value of $127 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent margin pressure and uncertainty in North American irrigation demand could quickly undermine this undervalued thesis if current trends continue.

Find out about the key risks to this Lindsay narrative.

Build Your Own Lindsay Narrative

If you see things differently or want to dig into the numbers yourself, you can build your own take on Lindsay in just a few minutes by using Do it your way.

A great starting point for your Lindsay research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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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