Knife River Corporation Just Missed Earnings - But Analysts Have Updated Their Models
Shareholders might have noticed that Knife River Corporation (NYSE:KNF) filed its second-quarter result this time last week. The early response was not positive, with shares down 7.6% to US$67.51 in the past week. It looks like a pretty bad result, all things considered. Although revenues of US$939m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 32% to hit US$0.77 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Knife River's ten analysts are now forecasting revenues of US$3.46b in 2026. This would be a satisfactory 4.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 14% to US$2.81. Before this earnings report, the analysts had been forecasting revenues of US$3.43b and earnings per share (EPS) of US$3.30 in 2026. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
See our latest analysis for Knife River
It might be a surprise to learn that the consensus price target was broadly unchanged at US$98.56, 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. The most optimistic Knife River analyst has a price target of US$118 per share, while the most pessimistic values it at US$73.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Knife River's growth to accelerate, with the forecast 9.3% annualised growth to the end of 2026 ranking favourably alongside historical growth of 6.5% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Knife River is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Knife River. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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. At Simply Wall St, we have a full range of analyst estimates for Knife River going out to 2028, and you can see them free on our platform here..
Plus, you should also learn about the 1 warning sign we've spotted with Knife River .
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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.