The quarterly results for Lamar Advertising Company (REIT) (NASDAQ:LAMR) were released last week, making it a good time to revisit its performance. It looks like the results were a bit of a negative overall. While revenues of US$458m were in line with analyst predictions, earnings were less than expected, missing estimates by 7.3% to hit US$0.99 per share. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. So we collected the latest post-earnings consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for Lamar Advertising Company (REIT) from five analysts is for revenues of US$1.8b in 2020, which is a credible 6.1% increase on its sales over the past 12 months. Earnings per share are expected to accumulate 5.7% to US$3.86. Yet prior to the latest earnings, analysts had been forecasting revenues of US$1.8b and earnings per share (EPS) of US$3.86 in 2020. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$83.63, suggesting that the company has met expectations in its recent result. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Lamar Advertising Company (REIT), with the most bullish analyst valuing it at US$89.00 and the most bearish at US$74.00 per share. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or that analysts have a clear view on its prospects.
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 can infer from the latest estimates that analysts are expecting a continuation of Lamar Advertising Company (REIT)’s historical trends, as next year’s forecast 6.1% revenue growth is roughly in line with 5.9% annual revenue growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 5.0% next year. It’s clear that while Lamar Advertising Company (REIT)’s revenue growth is expected to continue on its current trajectory, it’s only expected to grow in line with the market itself.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. The consensus price target held steady at US$83.63, with the latest estimates not enough to have an impact on analysts’ estimated valuations.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Lamar Advertising Company (REIT) going out to 2021, and you can see them free on our platform here..
It might also be worth considering whether Lamar Advertising Company (REIT)’s debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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