Need To Know: Analysts Are Much More Bullish On Stelco Holdings Inc. (TSE:STLC) Revenues
Celebrations may be in order for Stelco Holdings Inc. (TSE:STLC) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.
Following the upgrade, the consensus from six analysts covering Stelco Holdings is for revenues of CA$3.1b in 2023, implying a definite 11% decline in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CA$2.8b in 2023. It looks like there's been a clear increase in optimism around Stelco Holdings, given the solid increase in revenue forecasts.
View our latest analysis for Stelco Holdings
Additionally, the consensus price target for Stelco Holdings increased 7.2% to CA$54.65, showing a clear increase in optimism from the analysts involved. 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. The most optimistic Stelco Holdings analyst has a price target of CA$63.00 per share, while the most pessimistic values it at CA$48.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 11% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 18% 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 14% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Stelco Holdings is expected to lag the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Stelco Holdings.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential concern with Stelco Holdings, including concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 1 other concern we've identified .
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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.
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