LKQ Corporation Just Missed Earnings - But Analysts Have Updated Their Models

There's been a notable change in appetite for LKQ Corporation (NASDAQ:LKQ) shares in the week since its quarterly report, with the stock down 13% to US$32.17. It looks like the results were a bit of a negative overall. While revenues of US$3.6b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.5% to hit US$0.75 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, LKQ's seven analysts currently expect revenues in 2025 to be US$14.1b, approximately in line with the last 12 months. Statutory per share are forecast to be US$2.70, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$14.2b and earnings per share (EPS) of US$3.02 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

Check out our latest analysis for LKQ

The average price target fell 13% to US$45.60, with reduced earnings forecasts clearly tied to a lower valuation estimate. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic LKQ analyst has a price target of US$50.00 per share, while the most pessimistic values it at US$40.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting LKQ is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that LKQ's revenue growth is expected to slow, with the forecast 0.7% annualised growth rate until the end of 2025 being well below the historical 4.2% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.3% per year. Factoring in the forecast slowdown in growth, it seems obvious that LKQ is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for LKQ. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that LKQ's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of LKQ's future valuation.

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 LKQ going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for LKQ that you should be aware of.

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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.