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As you might know, MRC Global Inc. (NYSE:MRC) just kicked off its latest third-quarter results with some very strong numbers. Revenues and losses per share were both better than expected, with revenues of US$585m leading estimates by 3.2%. Statutory losses were smaller than the analystsexpected, coming in at US$0.04 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the consensus from MRC Global's twelve analysts is for revenues of US$2.40b in 2021, which would reflect a definite 13% decline in sales compared to the last year of performance. Losses are predicted to fall substantially, shrinking 86% to US$0.55. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$2.40b and losses of US$0.56 per share in 2021.
The consensus price target was unchanged at US$6.78, suggesting that the business - losses and all - is executing in line with estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on MRC Global, with the most bullish analyst valuing it at US$8.00 and the most bearish at US$5.25 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 MRC Global shareholders.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One more thing stood out to us about these estimates, and it's the idea that MRC Global'sdecline is expected to accelerate, with revenues forecast to fall 13% next year, topping off a historical decline of 3.2% a year over the past five years. Compare this against analyst estimates for companies in the wider industry, which suggest that revenues (in aggregate) are expected to grow 4.7% next year. So while a broad number of companies are forecast to decline, unfortunately MRC Global is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will 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.
With that in mind, we wouldn't be too quick to come to a conclusion on MRC Global. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for MRC Global going out to 2024, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 2 warning signs for MRC Global you should know about.
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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