Downgrade: Here's How Analysts See Lifetime Brands, Inc. (NASDAQ:LCUT) Performing In The Near Term

Market forces rained on the parade of Lifetime Brands, Inc. (NASDAQ:LCUT) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following this downgrade, Lifetime Brands' twin analysts are forecasting 2022 revenues to be US$802m, approximately in line with the last 12 months. Statutory earnings per share are presumed to surge 135% to US$0.94. Before this latest update, the analysts had been forecasting revenues of US$891m and earnings per share (EPS) of US$1.46 in 2022. Indeed, we can see that the analysts are a lot more bearish about Lifetime Brands' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Lifetime Brands

It'll come as no surprise then, to learn that the analysts have cut their price target 25% to US$16.00. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Lifetime Brands analyst has a price target of US$21.00 per share, while the most pessimistic values it at US$11.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 3.1% by the end of 2022. This indicates a significant reduction from annual growth of 8.0% 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 1.5% annually for the foreseeable future. It's pretty clear that Lifetime Brands' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Lifetime Brands. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Lifetime Brands' revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Lifetime Brands.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Lifetime Brands' financials, such as its declining profit margins. For more information, you can click here to discover this and the 3 other concerns we've identified.

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.