Earnings Miss: ALPEK, S.A.B. de C.V. Missed EPS By 51% And Analysts Are Revising Their Forecasts

It's been a good week for ALPEK, S.A.B. de C.V. (BMV:ALPEKA) shareholders, because the company has just released its latest quarterly results, and the shares gained 6.7% to Mex$12.71. Revenue of Mex$32b surpassed estimates by 3.0%, although statutory earnings per share missed badly, coming in 51% below expectations at Mex$0.07 per share. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for ALPEK. de

Following last week's earnings report, ALPEK. de's eleven analysts are forecasting 2024 revenues to be Mex$134.2b, approximately in line with the last 12 months. ALPEK. de is also expected to turn profitable, with statutory earnings of Mex$1.04 per share. In the lead-up to this report, the analysts had been modelling revenues of Mex$135.4b and earnings per share (EPS) of Mex$1.24 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at Mex$19.30, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on ALPEK. de, with the most bullish analyst valuing it at Mex$37.00 and the most bearish at Mex$11.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that ALPEK. de's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.3% growth on an annualised basis. This is compared to a historical growth rate of 8.5% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.3% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than ALPEK. de.

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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that ALPEK. de's revenue is expected to perform worse than the wider industry. The consensus price target held steady at Mex$19.30, 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 ALPEK. de. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple ALPEK. de analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - ALPEK. de has 2 warning signs (and 1 which is concerning) we think you should know about.

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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.