SSAB AB (publ) Just Beat EPS By 30%: Here's What Analysts Think Will Happen Next

Last week, you might have seen that SSAB AB (publ) (STO:SSAB A) released its first-quarter result to the market. The early response was not positive, with shares down 2.8% to kr62.14 in the past week. Revenues of kr27b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of kr2.57 an impressive 30% ahead of estimates. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for SSAB

Following the recent earnings report, the consensus from 14 analysts covering SSAB is for revenues of kr108.5b in 2024. This implies a discernible 5.4% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to crater 36% to kr7.63 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr109.8b and earnings per share (EPS) of kr7.35 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at kr81.36, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values SSAB at kr105 per share, while the most bearish prices it at kr58.00. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 7.1% by the end of 2024. This indicates a significant reduction from annual growth of 14% 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 4.2% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - SSAB is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around SSAB's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at kr81.36, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for SSAB going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - SSAB has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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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.