Analysts Just Made A Major Revision To Their Lannett Company, Inc. (NYSE:LCI) Revenue Forecasts

One thing we could say about the analysts on Lannett Company, Inc. (NYSE:LCI) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the current consensus, from the twin analysts covering Lannett Company, is for revenues of US$349m in 2022, which would reflect a chunky 14% reduction in Lannett Company's sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$390m in 2022. The consensus view seems to have become more pessimistic on Lannett Company, noting the measurable cut to revenue estimates in this update.

View our latest analysis for Lannett Company

The consensus price target fell 40% to US$3.00, with the analysts clearly less optimistic about Lannett Company's valuation following this update.

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. One more thing stood out to us about these estimates, and it's the idea that Lannett Company's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 26% to the end of 2022. This tops off a historical decline of 7.9% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 4.1% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Lannett Company to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also anticipating slower 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. Given the stark change in sentiment, we'd understand if investors became more cautious on Lannett Company after today.

Want to learn more? We have estimates for Lannett Company from its twin analysts out until 2023, and you can see them 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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