SinterCast AB (publ) (STO:SINT) Just Released Its Second-Quarter Results And Analysts Are Updating Their Estimates

Shareholders might have noticed that SinterCast AB (publ) (STO:SINT) filed its second-quarter result this time last week. The early response was not positive, with shares down 2.1% to kr114 in the past week. SinterCast reported in line with analyst predictions, delivering revenues of kr35m and statutory earnings per share of kr1.48, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for SinterCast

Following the recent earnings report, the consensus from lone analyst covering SinterCast is for revenues of kr136.0m in 2024. This implies a small 5.3% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to dive 22% to kr5.09 in the same period. Before this earnings report, the analyst had been forecasting revenues of kr142.0m and earnings per share (EPS) of kr5.32 in 2024. The analyst are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

The analyst made no major changes to their price target of kr130, suggesting the downgrades are not expected to have a long-term impact on SinterCast's valuation.

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 revenue is expected to reverse, with a forecast 10% annualised decline to the end of 2024. That is a notable change from historical growth of 6.0% 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 4.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - SinterCast is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analyst 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. The consensus price target held steady at kr130, with the latest estimates not enough to have an impact on their price target.

With that in mind, we wouldn't be too quick to come to a conclusion on SinterCast. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with SinterCast , and understanding these should be part of your investment process.

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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.