Here's What Analysts Are Forecasting For Russel Metals Inc. (TSE:RUS) After Its Annual Results

Shareholders might have noticed that Russel Metals Inc. (TSE:RUS) filed its full-year result this time last week. The early response was not positive, with shares down 2.5% to CA$44.57 in the past week. Russel Metals reported CA$4.5b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CA$4.33 beat expectations, being 2.3% higher than what the analysts expected. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Russel Metals

Taking into account the latest results, the most recent consensus for Russel Metals from six analysts is for revenues of CA$4.77b in 2024. If met, it would imply an okay 5.8% increase on its revenue over the past 12 months. Statutory earnings per share are expected to sink 20% to CA$3.44 in the same period. Before this earnings report, the analysts had been forecasting revenues of CA$4.81b and earnings per share (EPS) of CA$3.93 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at CA$49.25, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Russel Metals, with the most bullish analyst valuing it at CA$56.00 and the most bearish at CA$43.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 5.8% growth on an annualised basis. That is in line with its 6.5% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 1.7% annually. So although Russel Metals is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Russel Metals. Happily, there were no major changes to revenue forecasts, with the business still 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Russel Metals. Long-term earnings power is much more important than next year's profits. We have forecasts for Russel Metals going out to 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Russel Metals that you should be aware of.

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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.