Yahoo Finance LKQ Corporation Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
It's been a mediocre week for LKQ Corporation (NASDAQ:LKQ) shareholders, with the stock dropping 12% to US$42.92 in the week since its latest first-quarter results. It looks like a pretty bad result, all things considered. Although revenues of US$3.7b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 29% to hit US$0.59 per share. Following the result, the 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on LKQ after the latest results.
View our latest analysis for LKQ
Following the latest results, LKQ's ten analysts are now forecasting revenues of US$15.1b in 2024. This would be an okay 6.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 8.2% to US$3.37. Before this earnings report, the analysts had been forecasting revenues of US$15.3b and earnings per share (EPS) of US$3.66 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$59.62, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on LKQ, with the most bullish analyst valuing it at US$66.00 and the most bearish at US$52.70 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that LKQ's rate of growth is expected to accelerate meaningfully, with the forecast 8.4% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.6% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that LKQ is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$59.62, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for LKQ going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 4 warning signs with LKQ , and understanding them should be part of your investment process.
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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.
