What Should You Know About Public Joint Stock Company Magnitogorsk Iron & Steel Works’s (MCX:MAGN) Long Term Outlook?

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In December 2018, Public Joint Stock Company Magnitogorsk Iron & Steel Works (MCX:MAGN) announced its most recent earnings update, which suggested that the company gained from a robust tailwind, leading to a double-digit earnings growth of 11%. Below, I’ve presented key growth figures on how market analysts perceive Magnitogorsk Iron & Steel Works’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

View our latest analysis for Magnitogorsk Iron & Steel Works

Analysts’ outlook for next year seems pessimistic, with earnings decreasing by a double-digit -23%. In the next couple of years, earnings are expected to continue to be below today’s level, with a decline of -29% in 2021, eventually reaching US$936m in 2022.

MISX:MAGN Future Profit February 10th 19
MISX:MAGN Future Profit February 10th 19

Although it’s informative understanding the growth year by year relative to today’s figure, it may be more beneficial to estimate the rate at which the earnings are rising or falling every year, on average. The benefit of this method is that we can get a better picture of the direction of Magnitogorsk Iron & Steel Works’s earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To compute this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is -12%. This means that, we can anticipate Magnitogorsk Iron & Steel Works will chip away at a rate of -12% every year for the next couple of years.

Next Steps:

For Magnitogorsk Iron & Steel Works, I’ve compiled three pertinent aspects you should look at:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is MAGN worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MAGN is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MAGN? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.