EVRAZ plc (LON:EVR) Just Reported Full-Year Earnings And Analysts Are Lifting Their Estimates

Simply Wall St
·4 min read

It's been a good week for EVRAZ plc (LON:EVR) shareholders, because the company has just released its latest full-year results, and the shares gained 2.6% to UK£5.71. Revenues of US$9.8b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.58, missing estimates by 3.3%. 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.

View our latest analysis for EVRAZ

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Taking into account the latest results, the consensus forecast from EVRAZ's ten analysts is for revenues of US$12.4b in 2021, which would reflect a substantial 27% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 107% to US$1.20. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$11.7b and earnings per share (EPS) of US$0.91 in 2021. So it seems there's been a definite increase in optimism about EVRAZ's future following the latest results, with a very substantial lift in the earnings per share forecasts in particular.

It will come as no surprise to learn that the analysts have increased their price target for EVRAZ 6.0% to US$7.26on the back of these upgrades. 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 EVRAZ, with the most bullish analyst valuing it at US$7.10 and the most bearish at US$3.38 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await EVRAZ shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting EVRAZ's growth to accelerate, with the forecast 27% growth ranking favourably alongside historical growth of 7.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that EVRAZ is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards EVRAZ following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 EVRAZ analysts - going out to 2024, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 4 warning signs with EVRAZ , and understanding these should be part of your investment process.

This article by Simply Wall St is general in nature. 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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