Ardagh Metal Packaging S.A. Just Missed Earnings; Here's What Analysts Are Forecasting Now

Last week, you might have seen that Ardagh Metal Packaging S.A. (NYSE:AMBP) released its yearly result to the market. The early response was not positive, with shares down 7.6% to US$3.52 in the past week. Things were not great overall, with a surprise (statutory) loss of US$0.12 per share on revenues of US$4.8b, even though the analysts had been expecting a profit. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Ardagh Metal Packaging

Following the latest results, Ardagh Metal Packaging's five analysts are now forecasting revenues of US$4.95b in 2024. This would be an okay 2.9% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Ardagh Metal Packaging forecast to report a statutory profit of US$0.043 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.96b and earnings per share (EPS) of US$0.11 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.

The average price target fell 5.4% to US$4.04, with reduced earnings forecasts clearly tied to a lower valuation estimate. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Ardagh Metal Packaging analyst has a price target of US$5.00 per share, while the most pessimistic values it at US$3.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Ardagh Metal Packaging's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.9% growth on an annualised basis. This is compared to a historical growth rate of 9.1% over the past five years. Compare this to the 26 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 2.6% per year. So it's pretty clear that, while Ardagh Metal Packaging's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ardagh Metal Packaging. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Ardagh Metal Packaging going out to 2026, and you can see them 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 Ardagh Metal Packaging , and understanding these should be part of your investment process.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.