Metso Oyj Recorded A 7.9% Miss On Revenue: Analysts Are Revisiting Their Models

It's shaping up to be a tough period for Metso Oyj (HEL:METSO), which a week ago released some disappointing second-quarter results that could have a notable impact on how the market views the stock. Metso Oyj missed analyst forecasts, with revenues of €1.2b and statutory earnings per share (EPS) of €0.16, falling short by 7.9% and 6.4% respectively. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Metso Oyj

Taking into account the latest results, Metso Oyj's 14 analysts currently expect revenues in 2024 to be €5.08b, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 3.6% to €0.64. Before this earnings report, the analysts had been forecasting revenues of €5.26b and earnings per share (EPS) of €0.66 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The analysts made no major changes to their price target of €11.86, suggesting the downgrades are not expected to have a long-term impact on Metso Oyj's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Metso Oyj, with the most bullish analyst valuing it at €15.00 and the most bearish at €9.40 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 0.4% annualised decline to the end of 2024. That is a notable change from historical growth of 15% 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 3.3% per year. It's pretty clear that Metso Oyj's revenues are expected to perform substantially worse 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 Metso Oyj. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at €11.86, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Metso Oyj. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Metso Oyj analysts - 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 1 warning sign for Metso Oyj 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.

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