AdvanSix Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

AdvanSix Inc. (NYSE:ASIX) defied analyst predictions to release its quarterly results, which were ahead of market expectations. The company beat forecasts, with revenue of US$453m, some 6.3% above estimates, and statutory earnings per share (EPS) coming in at US$1.43, 29% ahead of expectations. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for AdvanSix

Taking into account the latest results, the consensus forecast from AdvanSix's dual analysts is for revenues of US$1.59b in 2024. This reflects a reasonable 6.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 341% to US$1.40. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.56b and earnings per share (EPS) of US$1.09 in 2024. Although the revenue estimates have not really changed, we can see there's been a considerable lift to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The average the analysts price target fell 11% to US$34.00, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them.

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. It's clear from the latest estimates that AdvanSix's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 6.5% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect AdvanSix to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around AdvanSix's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on AdvanSix. Long-term earnings power is much more important than next year's profits. We have analyst estimates for AdvanSix going out as far as 2025, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for AdvanSix (of which 1 is potentially serious!) you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com