Yahoo Finance Analysts Are Updating Their Ferrexpo Plc (LON:FXPO) Estimates After Its Annual Results
Shareholders of Ferrexpo Plc (LON:FXPO) will be pleased this week, given that the stock price is up 19% to UK£1.27 following its latest yearly results. It looks like the results were a bit of a negative overall. While revenues of US$1.5b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.2% to hit US$0.68 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Ferrexpo
Taking into account the latest results, the six analysts covering Ferrexpo provided consensus estimates of US$1.30b revenue in 2020, which would reflect a definite 14% decline on its sales over the past 12 months. Statutory earnings per share are forecast to plummet 45% to US$0.38 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.31b and earnings per share (EPS) of US$0.41 in 2020. 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$2.17, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Ferrexpo at US$3.25 per share, while the most bearish prices it at US$1.51. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. We would highlight that sales are expected to reverse, with the forecast 14% revenue decline a notable change from historical growth of 6.2% 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 0.4% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Ferrexpo is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ferrexpo. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Ferrexpo's revenues are expected to perform worse 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Ferrexpo analysts - going out to 2023, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 3 warning signs for Ferrexpo (1 doesn't sit too well with us!) that you need to be mindful of.
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