Knife River Corporation Just Missed EPS By 8.0%: Here's What Analysts Think Will Happen Next
Last week saw the newest quarterly earnings release from Knife River Corporation (NYSE:KNF), an important milestone in the company's journey to build a stronger business. It looks like the results were a bit of a negative overall. While revenues of US$1.3b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 8.0% to hit US$2.43 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Knife River after the latest results.
After the latest results, the eight analysts covering Knife River are now predicting revenues of US$3.53b in 2027. If met, this would reflect an okay 4.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 26% to US$2.99. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.56b and earnings per share (EPS) of US$3.03 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
See our latest analysis for Knife River
With no major changes to earnings forecasts, the consensus price target fell 6.0% to US$69.67, suggesting that the analysts might have previously been hoping for an earnings upgrade. 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. The most optimistic Knife River analyst has a price target of US$97.00 per share, while the most pessimistic values it at US$54.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Knife River's past performance and to peers in the same industry. We would highlight that Knife River's revenue growth is expected to slow, with the forecast 3.6% annualised growth rate until the end of 2027 being well below the historical 7.5% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.7% per year. Factoring in the forecast slowdown in growth, it seems obvious that Knife River is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Knife River's revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Knife River. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Knife River analysts - going out to 2028, and you can see them free on our platform here.
You still need to take note of risks, for example - Knife River has 1 warning sign 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.