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Nutrien Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's been a good week for Nutrien Ltd. (TSE:NTR) shareholders, because the company has just released its latest annual results, and the shares gained 4.3% to CA$71.91. Statutory earnings per share fell badly short of expectations, coming in at US$2.53, some 27% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$28b. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Nutrien

earnings-and-revenue-growth
earnings-and-revenue-growth

After the latest results, the consensus from Nutrien's 14 analysts is for revenues of US$26.6b in 2024, which would reflect a perceptible 5.4% decline in revenue compared to the last year of performance. Statutory earnings per share are predicted to jump 80% to US$4.59. Before this earnings report, the analysts had been forecasting revenues of US$27.3b and earnings per share (EPS) of US$4.46 in 2024. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

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The consensus has made no major changes to the price target of CA$87.15, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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. The most optimistic Nutrien analyst has a price target of CA$106 per share, while the most pessimistic values it at CA$64.77. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 5.4% annualised decline to the end of 2024. That is a notable change from historical growth of 15% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Nutrien is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Nutrien following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at CA$87.15, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Nutrien. Long-term earnings power is much more important than next year's profits. We have forecasts for Nutrien going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Nutrien has 4 warning signs we think you should be aware of.

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.