CEMEX, S.A.B. de C.V. Just Missed Earnings - But Analysts Have Updated Their Models

CEMEX, S.A.B. de C.V. (BMV:CEMEXCPO) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$4.5b, statutory earnings missed forecasts by 10%, coming in at just US$0.018 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for CEMEX. de

Taking into account the latest results, the current consensus from CEMEX. de's 14 analysts is for revenues of US$18.0b in 2024. This would reflect a satisfactory 2.6% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 448% to US$0.073. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$18.0b and earnings per share (EPS) of US$0.08 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at Mex$17.47, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on CEMEX. de, with the most bullish analyst valuing it at Mex$22.52 and the most bearish at Mex$15.29 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that CEMEX. de's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.2% growth on an annualised basis. This is compared to a historical growth rate of 7.4% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 1.0% per year. Even after the forecast slowdown in growth, it seems obvious that CEMEX. de is also expected to grow faster than the wider industry.

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. 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 Mex$17.47, 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 CEMEX. de. Long-term earnings power is much more important than next year's profits. We have forecasts for CEMEX. de going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for CEMEX. de you should be aware of.

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.

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