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Harsco Corporation (NYSE:HSC) missed earnings with its latest full-year results, disappointing overly-optimistic forecasters. It was a pretty negative result overall, with revenues of US$1.8b missing analyst predictions by 6.2%. Additionally, the business reported a statutory loss of US$0.33 per share, larger than the analysts had forecast prior to the result. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Harsco's four analysts is for revenues of US$2.18b in 2021, which would reflect a sizeable 24% increase on its sales over the past 12 months. Harsco is also expected to turn profitable, with statutory earnings of US$0.56 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.15b and earnings per share (EPS) of US$0.55 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$20.40. 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. Currently, the most bullish analyst values Harsco at US$28.00 per share, while the most bearish prices it at US$16.00. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Harsco's past performance and to peers in the same industry. For example, we noticed that Harsco's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 24%, well above its historical decline of 0.06% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.7% per year. Not only are Harsco's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$20.40, 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. We have forecasts for Harsco going out to 2025, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Harsco you should be aware of.
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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