Yahoo Finance Lithia Motors, Inc. Full-Year Results Just Came Out: Here's What Analysts Are Forecasting For Next Year
Last week saw the newest yearly earnings release from Lithia Motors, Inc. (NYSE:LAD), an important milestone in the company's journey to build a stronger business. It was a credible result overall, with revenues of US$13b and statutory earnings per share of US$11.60 both in line with analyst estimates, showing that Lithia Motors is executing in line with expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Lithia Motors after the latest results.
View our latest analysis for Lithia Motors
After the latest results, the eleven analysts covering Lithia Motors are now predicting revenues of US$13.5b in 2020. If met, this would reflect a satisfactory 6.8% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to accumulate 9.3% to US$12.80. Yet prior to the latest earnings, analysts had been forecasting revenues of US$13.5b and earnings per share (EPS) of US$12.79 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$153, suggesting that the company has met expectations in its recent result. 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. Currently, the most bullish analyst values Lithia Motors at US$176 per share, while the most bearish prices it at US$102. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Lithia Motors's performance in recent years. It's pretty clear that analysts expect Lithia Motors's revenue growth will slow down substantially, with revenues next year expected to grow 6.8%, compared to a historical growth rate of 14% over the past five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.0% next year. So it's pretty clear that, while Lithia Motors's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. The consensus price target held steady at US$153, 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. We have estimates - from multiple Lithia Motors analysts - going out to 2022, and you can see them free on our platform here.
You can also see whether Lithia Motors is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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