Analyst Estimates: Here's What Brokers Think Of AdvanSix Inc. (NYSE:ASIX) After Its Third-Quarter Report
Investors in AdvanSix Inc. (NYSE:ASIX) had a good week, as its shares rose 9.5% to close at US$16.82 following the release of its quarterly results. It was a pretty bad result overall; while revenues were in line with expectations at US$431m, statutory losses exploded to US$0.28 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on AdvanSix after the latest results.
Taking into account the latest results, the consensus forecast from AdvanSix's two analysts is for revenues of US$1.76b in 2027. This reflects a decent 8.7% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with AdvanSix forecast to report a statutory profit of US$0.96 per share. Before this earnings report, the analysts had been forecasting revenues of US$1.76b and earnings per share (EPS) of US$2.31 in 2027. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.
Check out our latest analysis for AdvanSix
It might be a surprise to learn that the consensus price target was broadly unchanged at US$20.00, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.
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. One thing stands out from these estimates, which is that AdvanSix is forecast to grow faster in the future than it has in the past, with revenues expected to display 6.9% annualised growth until the end of 2027. If achieved, this would be a much better result than the 4.0% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.7% annually. So it looks like AdvanSix is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for AdvanSix. 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 held steady at US$20.00, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for AdvanSix going out as far as 2027, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for AdvanSix that you need to be mindful of.
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