Raven’s 4Q Results Miss Analysts’ Expectations; Shares Sink 9%

Shares of Raven Industries dropped 8.7% in Monday’s extended trading session as the agriculture company reported lower-than-expected fiscal fourth-quarter (ended Jan. 31) results.

4Q earnings for Raven (RAVN) plunged 88.9% year-over-year to $0.01 per share and missed Street estimates of $0.11 per share. Net sales declined 6.6% to $80.1 million, falling short of analysts’ expectations of $88.65 million.

Growth in the applied technology division, driven by higher volumes in both the OEM and aftermarket channels, was mitigated by revenue declines in engineered films and aerostar divisions.

Raven’s CEO Dan Rykhus said, “Substantial order activity and improving market fundamentals provide confidence in our ability to drive strong year-over-year growth in Applied Technology and Engineered Films. As we execute on these opportunities, we will remain focused on aggressively investing to advance Raven Autonomy, Raven Composites and Raven Thunderhead while making significant progress on our multi-year plan to drive a step-change in our long-term growth.” (See Raven stock analysis on TipRanks)

Following the 4Q results, Oppenheimer analyst Noah Kaye reiterated a Buy rating and a price target of $41 (13.7% upside potential) on the stock.

Kaye said, “RAVN’s results came in below Street estimates, as continued headwinds from energy-related geomembrane and the timing of government contracts offset volume gains in agriculture.”

“While growth across the end markets was muted relative to our own expectations, management noted building momentum in ag and sequential improvement throughout the quarter in energy, setting a more favorable backdrop for FY22,” the analyst added.

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 2 Buys. The average analyst price target of $45.50 implies 26% upside potential to current levels. Shares have increased 69.6% over the past six months.

Raven scores an 8 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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