These Analysts Think Livent Corporation's (NYSE:LTHM) Sales Are Under Threat

Market forces rained on the parade of Livent Corporation (NYSE:LTHM) shareholders today, when the analysts downgraded their forecasts for next year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the 17 analysts covering Livent are now predicting revenues of US$1.2b in 2024. If met, this would reflect a substantial 26% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$1.3b in 2024. It looks like forecasts have become a fair bit less optimistic on Livent, given the substantial drop in revenue estimates.

View our latest analysis for Livent

The consensus price target fell 11% to US$26.66, with the analysts clearly less optimistic about Livent's valuation following this update.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 20% growth on an annualised basis. That is in line with its 20% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.3% per year. So it's pretty clear that Livent is forecast to grow substantially faster than its industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Livent next year. They're also forecasting more rapid revenue growth than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Livent after today.

Of course, this isn't the full story. At least one of Livent's 17 analysts has provided estimates out to 2025, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.