Yahoo Finance AMG Advanced Metallurgical Group N.V. Just Beat EPS By 65%: Here's What Analysts Think Will Happen Next
It's been a pretty great week for AMG Advanced Metallurgical Group N.V. (AMS:AMG) shareholders, with its shares surging 14% to €36.38 in the week since its latest quarterly results. It looks like a credible result overall - although revenues of US$425m were what the analysts expected, AMG Advanced Metallurgical Group surprised by delivering a (statutory) profit of US$2.09 per share, an impressive 65% above what was forecast. 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. 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 AMG Advanced Metallurgical Group
Taking into account the latest results, the consensus forecast from AMG Advanced Metallurgical Group's five analysts is for revenues of US$1.84b in 2023, which would reflect a meaningful 16% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to surge 52% to US$6.32. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.85b and earnings per share (EPS) of US$6.49 in 2023. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at €51.84, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 AMG Advanced Metallurgical Group analyst has a price target of €54.79 per share, while the most pessimistic values it at €45.48. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting AMG Advanced Metallurgical Group is an easy business to forecast or the the analysts are all using similar assumptions.
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. The analysts are definitely expecting AMG Advanced Metallurgical Group's growth to accelerate, with the forecast 13% annualised growth to the end of 2023 ranking favourably alongside historical growth of 2.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 3.4% annually. It seems obvious that as part of the brighter growth outlook, AMG Advanced Metallurgical Group is expected to grow faster 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, they made no changes to their revenue estimates - and they expect sales to perform better 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 forecasts for AMG Advanced Metallurgical Group going out to 2024, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 4 warning signs for AMG Advanced Metallurgical Group (1 is potentially serious) you should be aware of.
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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.
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