A week ago, The Andersons, Inc. (NASDAQ:ANDE) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. Results overall were solid, with revenues arriving 2.5% better than analyst forecasts at US$1.9b. Higher revenues also resulted in substantially lower statutory losses which, at US$0.03 per share, were 2.5% smaller than the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Andersons' four analysts is for revenues of US$7.76b in 2021, which would reflect a reasonable 2.7% improvement in sales compared to the last 12 months. Andersons is also expected to turn profitable, with statutory earnings of US$1.76 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$7.81b and earnings per share (EPS) of US$1.76 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$24.00, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Andersons, with the most bullish analyst valuing it at US$26.00 and the most bearish at US$22.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Andersons' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Andersons' revenue growth will slow down substantially, with revenues next year expected to grow 2.7%, compared to a historical growth rate of 16% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.3% next year. Factoring in the forecast slowdown in growth, it looks like Andersons is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Andersons going out to 2021, and you can see them free on our platform here..
Even so, be aware that Andersons is showing 3 warning signs in our investment analysis , and 1 of those is a bit concerning...
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