Need To Know: Analysts Are Much More Bullish On Aperam S.A. (AMS:APAM) Revenues

Shareholders in Aperam S.A. (AMS:APAM) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Aperam will make substantially more sales than they'd previously expected.

Following the upgrade, the consensus from nine analysts covering Aperam is for revenues of €7.5b in 2023, implying a measurable 5.6% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to tumble 71% to €4.12 in the same period. Before this latest update, the analysts had been forecasting revenues of €7.1b and earnings per share (EPS) of €4.31 in 2023. So it's pretty clear consensus is mixed on Aperam after the new consensus numbers; while the analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.

Check out our latest analysis for Aperam

There's been no major changes to analyst price target of €34.60, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' 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 Aperam, with the most bullish analyst valuing it at €52.00 and the most bearish at €26.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 4.5% by the end of 2023. This indicates a significant reduction from annual growth of 8.3% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 2.9% per year. The forecasts do look bearish for Aperam, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Notably, analysts also upgraded their revenue estimates, with sales performing well although Aperam's revenue growth is expected to trail that of the wider market. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at Aperam.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Aperam analysts - going out to 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.