Industry Analysts Just Upgraded Their Public Joint Stock Company Magnitogorsk Iron & Steel Works (MCX:MAGN) Revenue Forecasts By 20%

By
Simply Wall St
Published
July 24, 2021
MISX:MAGN
Source: Shutterstock

Celebrations may be in order for Public Joint Stock Company Magnitogorsk Iron & Steel Works (MCX:MAGN) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The market seems to be pricing in some improvement in the business too, with the stock up 6.4% over the past week, closing at ₽66.21. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the latest consensus from Magnitogorsk Iron & Steel Works' eleven analysts is for revenues of US$12b in 2021, which would reflect a major 37% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$10b of revenue in 2021. It looks like there's been a clear increase in optimism around Magnitogorsk Iron & Steel Works, given the substantial gain in revenue forecasts.

View our latest analysis for Magnitogorsk Iron & Steel Works

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MISX:MAGN Earnings and Revenue Growth July 24th 2021

We'd point out that there was no major changes to their price target of US$1.04, suggesting the latest estimates were not enough to shift their view on the value of the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Magnitogorsk Iron & Steel Works analyst has a price target of US$91.00 per share, while the most pessimistic values it at US$58.94. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily on 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. The analysts are definitely expecting Magnitogorsk Iron & Steel Works' growth to accelerate, with the forecast 88% annualised growth to the end of 2021 ranking favourably alongside historical growth of 4.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 0.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Magnitogorsk Iron & Steel Works is expected to grow much faster than its industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Magnitogorsk Iron & Steel Works this year. They're also forecasting more rapid revenue growth than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Magnitogorsk Iron & Steel Works.

Hungry for more information? We have analyst estimates for Magnitogorsk Iron & Steel Works going out to 2023, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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