Earnings Miss: ArcelorMittal S.A. Missed EPS By 14% And Analysts Are Revising Their Forecasts

ArcelorMittal S.A. (AMS:MT) shareholders are probably feeling a little disappointed, since its shares fell 6.4% to €19.42 in the week after its latest second-quarter results. Revenues were in line with forecasts, at US$16b, although statutory earnings per share came in 14% below what the analysts expected, at US$0.63 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for ArcelorMittal

Taking into account the latest results, ArcelorMittal's 13 analysts currently expect revenues in 2024 to be US$62.8b, approximately in line with the last 12 months. ArcelorMittal is also expected to turn profitable, with statutory earnings of US$3.37 per share. Before this earnings report, the analysts had been forecasting revenues of US$64.3b and earnings per share (EPS) of US$3.55 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

Despite the cuts to forecast earnings, there was no real change to the €29.49 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 ArcelorMittal, with the most bullish analyst valuing it at €37.85 and the most bearish at €23.82 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.9% by the end of 2024. This indicates a significant reduction from annual growth of 2.1% 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 2.0% annually for the foreseeable future. It's pretty clear that ArcelorMittal's revenues are expected to perform substantially worse 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on ArcelorMittal. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for ArcelorMittal going out to 2026, and you can see them free on our platform here..

You can also see whether ArcelorMittal is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.

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