MRC Global Inc. Just Beat EPS By 15%: Here's What Analysts Think Will Happen Next

A week ago, MRC Global Inc. (NYSE:MRC) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. MRC Global beat earnings, with revenues hitting US$806m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 15%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for MRC Global

Following last week's earnings report, MRC Global's six analysts are forecasting 2024 revenues to be US$3.35b, approximately in line with the last 12 months. Statutory earnings per share are predicted to ascend 11% to US$0.98. Before this earnings report, the analysts had been forecasting revenues of US$3.31b and earnings per share (EPS) of US$1.03 in 2024. 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.

The consensus price target held steady at US$15.70, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic MRC Global analyst has a price target of US$17.00 per share, while the most pessimistic values it at US$13.50. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting MRC Global is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's also worth noting that the years of declining revenue look to have come to an end, with the forecast stauing flat to the end of 2024. Historically, MRC Global's top line has shrunk approximately 2.0% annually over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.7% annually. Although MRC Global's revenues are expected to improve, it seems that it is still expected to grow slower 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. The consensus price target held steady at US$15.70, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on MRC Global. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for MRC Global going out to 2026, and you can see them free on our platform here..

You can also see whether MRC Global is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.