RHI Magnesita N.V. (LON:RHIM) Half-Year Results: Here's What Analysts Are Forecasting For This Year

RHI Magnesita N.V. (LON:RHIM) shareholders are probably feeling a little disappointed, since its shares fell 9.7% to UK£37.84 in the week after its latest half-yearly results. Results were roughly in line with estimates, with revenues of €1.2b and statutory earnings per share of €0.50. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for RHI Magnesita

Taking into account the latest results, the consensus forecast from RHI Magnesita's eight analysts is for revenues of €2.42b in 2021, which would reflect a reasonable 5.9% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 143% to €3.56. Yet prior to the latest earnings, the analysts had been anticipated revenues of €2.45b and earnings per share (EPS) of €3.54 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of UK£50.21, suggesting that the company has met expectations in its recent result. 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. Currently, the most bullish analyst values RHI Magnesita at UK£61.59 per share, while the most bearish prices it at UK£43.92. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. The analysts are definitely expecting RHI Magnesita's growth to accelerate, with the forecast 12% annualised growth to the end of 2021 ranking favourably alongside historical growth of 8.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.3% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect RHI Magnesita to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at UK£50.21, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for RHI Magnesita going out to 2023, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for RHI Magnesita (1 is a bit unpleasant!) that you should be aware of.

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