New Forecasts: Here's What One Analyst Thinks The Future Holds For Ryerson Holding Corporation (NYSE:RYI)

By
Simply Wall St
Published
August 10, 2021
NYSE:RYI
Source: Shutterstock

Shareholders in Ryerson Holding Corporation (NYSE:RYI) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The market may be pricing in some blue sky too, with the share price gaining 40% to US$21.98 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the most recent consensus for Ryerson Holding from its single analyst is for revenues of US$5.6b in 2021 which, if met, would be a huge 33% increase on its sales over the past 12 months. Statutory earnings per share are presumed to soar 153% to US$5.40. Before this latest update, the analyst had been forecasting revenues of US$5.0b and earnings per share (EPS) of US$3.75 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Check out our latest analysis for Ryerson Holding

earnings-and-revenue-growth
NYSE:RYI Earnings and Revenue Growth August 11th 2021

It will come as no surprise to learn that the analyst has increased their price target for Ryerson Holding 29% to US$20.00 on the back of these upgrades.

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. It's clear from the latest estimates that Ryerson Holding's rate of growth is expected to accelerate meaningfully, with the forecast 76% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 7.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 0.5% annually. So it's clear with the acceleration in growth, Ryerson Holding is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also a nice increase in the price target, with the analyst apparently feeling that the intrinsic value of the business is improving. Given that the analyst appears to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Ryerson Holding.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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