Analysts Are Updating Their Nemak, S. A. B. de C. V. (BMV:NEMAKA) Estimates After Its Third-Quarter Results

Investors in Nemak, S. A. B. de C. V. (BMV:NEMAKA) had a good week, as its shares rose 3.5% to close at Mex$2.07 following the release of its third-quarter results. It was a workmanlike result, with revenues of US$1.2b coming in 2.6% ahead of expectations, and statutory earnings per share of US$0.0014, in line with analyst appraisals. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Nemak S. A. B. de C. V

Following last week's earnings report, Nemak S. A. B. de C. V's five analysts are forecasting 2025 revenues to be US$4.80b, approximately in line with the last 12 months. Per-share earnings are expected to bounce 104% to US$0.034. In the lead-up to this report, the analysts had been modelling revenues of US$4.84b and earnings per share (EPS) of US$0.032 in 2025. So the consensus seems to have become somewhat more optimistic on Nemak S. A. B. de C. V's earnings potential following these results.

The consensus price target was unchanged at Mex$6.63, 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 Nemak S. A. B. de C. V, with the most bullish analyst valuing it at Mex$11.00 and the most bearish at Mex$4.00 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. 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. We would highlight that revenue is expected to reverse, with a forecast 0.7% annualised decline to the end of 2025. That is a notable change from historical growth of 9.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 11% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Nemak S. A. B. de C. V 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 Nemak S. A. B. de C. V 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 Nemak S. A. B. de C. V's revenue is expected to perform worse than the wider industry. The consensus price target held steady at Mex$6.63, 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 Nemak S. A. B. de C. V. Long-term earnings power is much more important than next year's profits. We have forecasts for Nemak S. A. B. de C. V going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Nemak S. A. B. de C. V (1 shouldn't be ignored!) that you need to take into consideration.

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.