SSAB AB (publ) Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

It's been a good week for SSAB AB (publ) (STO:SSAB A) shareholders, because the company has just released its latest third-quarter results, and the shares gained 2.6% to kr50.66. It looks like a credible result overall - although revenues of kr24b were what the analysts expected, SSAB surprised by delivering a (statutory) profit of kr1.05 per share, an impressive 64% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on SSAB after the latest results.

See our latest analysis for SSAB

Taking into account the latest results, the current consensus, from the 14 analysts covering SSAB, is for revenues of kr103.6b in 2025. This implies a measurable 2.5% reduction in SSAB's revenue over the past 12 months. Statutory earnings per share are expected to tumble 27% to kr5.85 in the same period. Before this earnings report, the analysts had been forecasting revenues of kr104.5b and earnings per share (EPS) of kr6.17 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at kr62.92, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 SSAB analyst has a price target of kr82.00 per share, while the most pessimistic values it at kr51.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 2.0% annualised decline to the end of 2025. That is a notable change from historical growth of 13% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.5% per year. It's pretty clear that SSAB'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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple SSAB analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for SSAB (1 makes us a bit uncomfortable!) that we have uncovered.

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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.