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

Last week saw the newest annual earnings release from Grupo Cementos de Chihuahua, S.A.B. de C.V. (BMV:GCC), an important milestone in the company's journey to build a stronger business. Revenues of US$938m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.39, missing estimates by 8.1%. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Grupo Cementos de Chihuahua. de

Taking into account the latest results, the most recent consensus for Grupo Cementos de Chihuahua. de from ten analysts is for revenues of US$983.2m in 2021 which, if met, would be a reasonable 4.8% increase on its sales over the past 12 months. Statutory earnings per share are predicted to expand 14% to US$0.44. Before this earnings report, the analysts had been forecasting revenues of US$979.3m and earnings per share (EPS) of US$0.43 in 2021. So the consensus seems to have become somewhat more optimistic on Grupo Cementos de Chihuahua. de's earnings potential following these results.

There's been no major changes to the consensus price target of Mex$146, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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. Currently, the most bullish analyst values Grupo Cementos de Chihuahua. de at Mex$158 per share, while the most bearish prices it at Mex$133. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Grupo Cementos de Chihuahua. de's revenue growth is expected to slow, with forecast 4.8% increase next year well below the historical 7.1%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.7% next year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Grupo Cementos de Chihuahua. de.

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 Grupo Cementos de Chihuahua. de following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$146, 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. At Simply Wall St, we have a full range of analyst estimates for Grupo Cementos de Chihuahua. de going out to 2024, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for Grupo Cementos de Chihuahua. de that you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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