Acerinox, S.A. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Investors in Acerinox, S.A. (BME:ACX) had a good week, as its shares rose 2.8% to close at €9.71 following the release of its interim results. Revenues €2.8b disappointed slightly, at2.1% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of €0.46 coming in 15% above what was anticipated. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Acerinox after the latest results.

See our latest analysis for Acerinox

Following last week's earnings report, Acerinox's twelve analysts are forecasting 2024 revenues to be €5.85b, approximately in line with the last 12 months. Statutory earnings per share are predicted to soar 284% to €1.00. In the lead-up to this report, the analysts had been modelling revenues of €6.46b and earnings per share (EPS) of €1.19 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

The analysts made no major changes to their price target of €13.73, suggesting the downgrades are not expected to have a long-term impact on Acerinox's 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 Acerinox analyst has a price target of €17.75 per share, while the most pessimistic values it at €8.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Acerinox's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Acerinox's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.2% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.1% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Acerinox.

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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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 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 Acerinox going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 3 warning signs for Acerinox that we have uncovered.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com