Yahoo Finance Results: ArcelorMittal S.A. Exceeded Expectations And The Consensus Has Updated Its Estimates
It's been a good week for ArcelorMittal S.A. (AMS:MT) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.3% to €24.30. It looks like a credible result overall - although revenues of US$16b were what the analysts expected, ArcelorMittal surprised by delivering a (statutory) profit of US$1.16 per share, an impressive 31% above what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for ArcelorMittal
Taking into account the latest results, ArcelorMittal's twelve analysts currently expect revenues in 2024 to be US$65.1b, approximately in line with the last 12 months. Statutory earnings per share are predicted to shoot up 356% to US$4.24. In the lead-up to this report, the analysts had been modelling revenues of US$65.7b and earnings per share (EPS) of US$4.14 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at €32.04, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. There are some variant perceptions on ArcelorMittal, with the most bullish analyst valuing it at €39.63 and the most bearish at €26.02 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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 revenue is expected to reverse, with a forecast 2.0% annualised decline to the end of 2024. That is a notable change from historical growth of 2.1% 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 1.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - ArcelorMittal is expected to lag the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around ArcelorMittal's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at €32.04, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on ArcelorMittal. Long-term earnings power is much more important than next year's profits. We have forecasts for ArcelorMittal going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for ArcelorMittal that you need to take into consideration.
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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.
