Earnings Release: Here's Why Analysts Cut Their Farmer Bros. Co. (NASDAQ:FARM) Price Target To US$4.75

It's shaping up to be a tough period for Farmer Bros. Co. (NASDAQ:FARM), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. It was a pretty negative result overall, with revenues of US$82m missing analyst predictions by 7.8%. Worse, the business reported a statutory loss of US$0.23 per share, much larger than the analysts had forecast prior to the result. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

We've discovered 3 warning signs about Farmer Bros. View them for free.

After the latest results, the twin analysts covering Farmer Bros are now predicting revenues of US$354.1m in 2026. If met, this would reflect an okay 3.7% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 59% to US$0.28. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$371.8m and losses of US$0.20 per share in 2026. So it's pretty clear the analysts have mixed opinions on Farmer Bros after this update; revenues were downgraded and per-share losses expected to increase.

See our latest analysis for Farmer Bros

The average price target fell 9.5% to US$4.75, implicitly signalling that lower earnings per share are a leading indicator for Farmer Bros' valuation.

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. One thing stands out from these estimates, which is that Farmer Bros is forecast to grow faster in the future than it has in the past, with revenues expected to display 2.9% annualised growth until the end of 2026. If achieved, this would be a much better result than the 8.3% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 2.4% per year. So it looks like Farmer Bros is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Farmer Bros' future valuation.

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. We have analyst estimates for Farmer Bros going out as far as 2026, and you can see them free on our platform here.

Even so, be aware that Farmer Bros is showing 3 warning signs in our investment analysis , and 1 of those is concerning...

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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.