It's been a good week for Littelfuse, Inc. (NASDAQ:LFUS) shareholders, because the company has just released its latest annual results, and the shares gained 3.6% to US$243. It was a credible result overall, with revenues of US$2.4b and statutory earnings per share of US$10.34 both in line with analyst estimates, showing that Littelfuse is executing in line with expectations. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus, from the seven analysts covering Littelfuse, is for revenues of US$2.24b in 2024. This implies a small 5.3% reduction in Littelfuse's revenue over the past 12 months. Statutory earnings per share are forecast to sink 16% to US$8.73 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$2.33b and earnings per share (EPS) of US$10.31 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.
The analysts made no major changes to their price target of US$268, suggesting the downgrades are not expected to have a long-term impact on Littelfuse's 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 Littelfuse, with the most bullish analyst valuing it at US$300 and the most bearish at US$235 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 5.3% annualised decline to the end of 2024. That is a notable change from historical growth of 12% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.0% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Littelfuse is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Littelfuse. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$268, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Littelfuse going out to 2026, and you can see them free on our platform here.
You can also view our analysis of Littelfuse's balance sheet, and whether we think Littelfuse is carrying too much debt, for free on our platform here.
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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.