Investors in Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE:LOMA) had a good week, as its shares rose 5.9% to close at US$3.74 following the release of its first-quarter results. Results were roughly in line with estimates, with revenues of AR$7.8b and statutory earnings per share of AR$30.81. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Loma Negra Compañía Industrial Argentina Sociedad Anónima after the latest results.
Taking into account the latest results, the most recent consensus for Loma Negra Compañía Industrial Argentina Sociedad Anónima from seven analysts is for revenues of AR$41.9b in 2020 which, if met, would be a notable 18% increase on its sales over the past 12 months. Statutory earnings per share are forecast to dip 7.3% to AR$24.82 in the same period. In the lead-up to this report, the analysts had been modelling revenues of AR$37.9b and earnings per share (EPS) of AR$24.82 in 2020. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.
It may not be a surprise to see thatthe analysts have reconfirmed their price target of US$7.63, implying that the uplift in sales is not expected to greatly contribute to Loma Negra Compañía Industrial Argentina Sociedad Anónima's valuation in the near term. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Loma Negra Compañía Industrial Argentina Sociedad Anónima, with the most bullish analyst valuing it at US$13.90 and the most bearish at US$4.60 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Loma Negra Compañía Industrial Argentina Sociedad Anónima's revenue growth is expected to slow, with forecast 18% increase next year well below the historical 27%p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.7% next year. Even after the forecast slowdown in growth, it seems obvious that Loma Negra Compañía Industrial Argentina Sociedad Anónima is also expected to grow faster than 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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than 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. We have forecasts for Loma Negra Compañía Industrial Argentina Sociedad Anónima going out to 2024, and you can see them free on our platform here.
It is also worth noting that we have found 3 warning signs for Loma Negra Compañía Industrial Argentina Sociedad Anónima (1 makes us a bit uncomfortable!) that you need to take into consideration.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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