Yahoo Finance The Mosaic Company Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
The analysts might have been a bit too bullish on The Mosaic Company (NYSE:MOS), given that the company fell short of expectations when it released its second-quarter results last week. Results showed a clear earnings miss, with US$5.4b revenue coming in 4.3% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$2.85 missed the mark badly, arriving some 27% below what was expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Mosaic
Taking into account the latest results, the current consensus from Mosaic's 20 analysts is for revenues of US$20.7b in 2022, which would reflect a major 25% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 38% to US$13.05. Before this earnings report, the analysts had been forecasting revenues of US$21.6b and earnings per share (EPS) of US$13.81 in 2022. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
The analysts made no major changes to their price target of US$67.00, suggesting the downgrades are not expected to have a long-term impact on Mosaic's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Mosaic, with the most bullish analyst valuing it at US$93.00 and the most bearish at US$44.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Mosaic's growth to accelerate, with the forecast 57% annualised growth to the end of 2022 ranking favourably alongside historical growth of 12% per annum 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 2.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Mosaic is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Mosaic. They also downgraded their revenue estimates, although industry data suggests that Mosaic's revenues are expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Mosaic analysts - going out to 2024, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Mosaic you should be aware of, and 1 of them is significant.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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