Salzgitter AG (ETR:SZG) Third-Quarter Results: Here's What Analysts Are Forecasting For Next Year

The third-quarter results for Salzgitter AG (ETR:SZG) were released last week, making it a good time to revisit its performance. Revenues were in line with expectations, at €2.5b, while statutory losses ballooned to €3.34 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Salzgitter

Taking into account the latest results, the most recent consensus for Salzgitter from nine analysts is for revenues of €10.4b in 2025. If met, it would imply a modest 2.9% increase on its revenue over the past 12 months. Salzgitter is also expected to turn profitable, with statutory earnings of €2.44 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of €10.4b and earnings per share (EPS) of €2.53 in 2025. 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.

It might be a surprise to learn that the consensus price target was broadly unchanged at €18.99, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Salzgitter, with the most bullish analyst valuing it at €45.00 and the most bearish at €11.50 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Salzgitter's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.3% growth on an annualised basis. This is compared to a historical growth rate of 8.3% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.1% annually. Factoring in the forecast slowdown in growth, it looks like Salzgitter is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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 estimates - from multiple Salzgitter analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Salzgitter is showing 2 warning signs in our investment analysis , you should know about...

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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.