Last week saw the newest quarterly earnings release from Lincoln Electric Holdings, Inc. (NASDAQ:LECO), an important milestone in the company's journey to build a stronger business. Lincoln Electric Holdings beat revenue expectations by 2.5%, at US$1.0b. Statutory earnings per share (EPS) came in at US$2.10, some 5.5% short of analyst estimates. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, Lincoln Electric Holdings' ten analysts currently expect revenues in 2025 to be US$4.05b, approximately in line with the last 12 months. Statutory earnings per share are predicted to rise 7.7% to US$8.89. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.02b and earnings per share (EPS) of US$9.21 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
See our latest analysis for Lincoln Electric Holdings
It might be a surprise to learn that the consensus price target was broadly unchanged at US$215, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Lincoln Electric Holdings at US$250 per share, while the most bearish prices it at US$179. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Lincoln Electric Holdings shareholders.
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. It's pretty clear that there is an expectation that Lincoln Electric Holdings' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.7% growth on an annualised basis. This is compared to a historical growth rate of 9.6% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.8% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Lincoln Electric Holdings.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Lincoln Electric Holdings' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$215, with the latest estimates not enough to have an impact on their price targets.
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 Lincoln Electric Holdings analysts - going out to 2027, and you can see them free on our platform here.
You still need to take note of risks, for example - Lincoln Electric Holdings has 1 warning sign we think you should be aware of.
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