Leon's Furniture Limited (TSE:LNF) shareholders are probably feeling a little disappointed, since its shares fell 4.0% to CA$23.62 in the week after its latest second-quarter results. Revenues of CA$631m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CA$0.51, missing estimates by 3.8%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Leon's Furniture after the latest results.
Following last week's earnings report, Leon's Furniture's six analysts are forecasting 2026 revenues to be CA$2.55b, approximately in line with the last 12 months. Statutory earnings per share are forecast to dip 4.9% to CA$2.18 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CA$2.58b and earnings per share (EPS) of CA$2.26 in 2026. 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.
Check out our latest analysis for Leon's Furniture
It might be a surprise to learn that the consensus price target was broadly unchanged at CA$33.86, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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 Leon's Furniture, with the most bullish analyst valuing it at CA$50.00 and the most bearish at CA$27.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. The analysts are definitely expecting Leon's Furniture's growth to accelerate, with the forecast 1.2% annualised growth to the end of 2026 ranking favourably alongside historical growth of 0.5% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. So it's clear that despite the acceleration in growth, Leon's Furniture is expected to grow meaningfully slower than the industry average.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Leon's Furniture. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 forecasts for Leon's Furniture going out to 2028, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Leon's Furniture , and understanding this should be part of your investment process.
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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.