Yahoo Finance ArcelorMittal S.A. Just Missed EPS By 12%: Here's What Analysts Think Will Happen Next
It's been a pretty great week for ArcelorMittal S.A. (AMS:MT) shareholders, with its shares surging 11% to €26.07 in the week since its latest third-quarter results. It was not a great result overall. Although revenues beat expectations, hitting US$19b, statutory earnings missed analyst forecasts by 12%, coming in at just US$1.11 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for ArcelorMittal
Following the recent earnings report, the consensus from 15 analysts covering ArcelorMittal is for revenues of US$61.5b in 2023, implying a concerning 27% decline in sales compared to the last 12 months. Statutory earnings per share are expected to nosedive 71% to US$4.64 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$61.5b and earnings per share (EPS) of US$4.77 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.
The consensus price target held steady at €32.70, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on ArcelorMittal, with the most bullish analyst valuing it at €47.73 and the most bearish at €21.79 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 22% by the end of 2023. This indicates a significant reduction from annual growth of 1.0% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 3.2% annually for the foreseeable future. The forecasts do look bearish for ArcelorMittal, since they're expecting it to shrink faster than 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 ArcelorMittal. They also made no changes to their revenue estimates, implying the business is not expected to experience any major impacts to the sales trajectory in the near term, even though sales are expected to trail the wider industry. The consensus price target held steady at €32.70, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for ArcelorMittal 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 1 warning sign for ArcelorMittal that you should be aware of.
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.
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