Stelco Holdings Inc. Just Missed EPS By 19%: Here's What Analysts Think Will Happen Next

As you might know, Stelco Holdings Inc. (TSE:STLC) last week released its latest quarterly, and things did not turn out so great for shareholders. Stelco Holdings missed earnings this time around, with CA$746m revenue coming in 3.1% below what the analysts had modelled. Statutory earnings per share (EPS) of CA$1.14 also fell short of expectations by 19%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Stelco Holdings

Taking into account the latest results, the current consensus, from the eight analysts covering Stelco Holdings, is for revenues of CA$2.90b in 2024. This implies a perceptible 2.4% reduction in Stelco Holdings' revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 45% to CA$5.88. In the lead-up to this report, the analysts had been modelling revenues of CA$2.97b and earnings per share (EPS) of CA$5.75 in 2024. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

The consensus has made no major changes to the price target of CA$51.93, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Stelco Holdings analyst has a price target of CA$58.50 per share, while the most pessimistic values it at CA$47.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 3.2% annualised decline to the end of 2024. That is a notable change from historical growth of 13% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 12% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Stelco Holdings is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Stelco Holdings following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at CA$51.93, 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. At Simply Wall St, we have a full range of analyst estimates for Stelco Holdings going out to 2026, 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 2 warning signs with Stelco Holdings , and understanding them 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.