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Shareholders might have noticed that L.B. Foster Company (NASDAQ:FSTR) filed its first-quarter result this time last week. The early response was not positive, with shares down 9.8% to US$18.17 in the past week. Revenues missed expectations, with revenue of US$98m falling 15% short of forecasts. Earnings correspondingly dipped, with L.B. Foster reporting a statutory loss of US$0.20 per share, where the analysts were expecting a profit. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from L.B. Foster's two analysts is for revenues of US$540.1m in 2025. This would reflect a modest 7.1% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to dive 52% to US$1.65 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$543.7m and earnings per share (EPS) of US$1.71 in 2025. 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.
See our latest analysis for L.B. Foster
It might be a surprise to learn that the consensus price target fell 17% to US$29.00, with the analysts clearly linking lower forecast earnings to the performance of the stock price.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting L.B. Foster's growth to accelerate, with the forecast 9.6% annualised growth to the end of 2025 ranking favourably alongside historical growth of 0.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that L.B. Foster 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 L.B. Foster's future valuation.