Earnings Beat: Tenaris S.A. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Tenaris S.A. (BIT:TEN) shareholders are probably feeling a little disappointed, since its shares fell 9.7% to €15.98 in the week after its latest first-quarter results. It looks like a credible result overall - although revenues of US$3.4b were in line with what the analysts predicted, Tenaris surprised by delivering a statutory profit of US$0.64 per share, a notable 14% above expectations. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Tenaris

Following the recent earnings report, the consensus from 16 analysts covering Tenaris is for revenues of US$13.2b in 2024. This implies a small 6.7% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to tumble 25% to US$2.31 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$13.2b and earnings per share (EPS) of US$2.16 in 2024. So the consensus seems to have become somewhat more optimistic on Tenaris' earnings potential following these results.

The consensus price target was unchanged at €19.64, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Tenaris, with the most bullish analyst valuing it at €22.82 and the most bearish at €15.72 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Tenaris' past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 8.9% by the end of 2024. This indicates a significant reduction from annual growth of 20% 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 1.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Tenaris 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 Tenaris following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Tenaris' revenue is expected to perform worse than the wider industry. The consensus price target held steady at €19.64, with the latest estimates not enough to have an impact on their price targets.

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. At Simply Wall St, we have a full range of analyst estimates for Tenaris 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 2 warning signs for Tenaris (1 can't be ignored!) that we have uncovered.

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

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.