Results: REX American Resources Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates

Last week, you might have seen that REX American Resources Corporation (NYSE:REX) released its annual result to the market. The early response was not positive, with shares down 5.4% to US$28.24 in the past week. REX American Resources reported US$855m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.57 beat expectations, being 7.5% higher than what the analyst expected. The analyst 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. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for REX American Resources

After the latest results, the consensus from REX American Resources' single analyst is for revenues of US$756.0m in 2024, which would reflect a considerable 12% decline in sales compared to the last year of performance. Statutory earnings per share are predicted to step up 20% to US$1.91. In the lead-up to this report, the analyst had been modelling revenues of US$811.0m and earnings per share (EPS) of US$2.00 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The average price target climbed 5.6% to US$38.00despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 12% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 16% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 5.9% per year. So it's pretty clear that REX American Resources' revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately they also cut their revenue estimates for next year, and forecasts imply the business' revenues are expected to perform worse than the wider industry. That said, earnings per share are more important for creating value for shareholders. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for REX American Resources you should be aware 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.