- Oops!Something went wrong.Please try again later.
A week ago, American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 12% higher than the analysts had forecast, at US$1.4b, while EPS were US$0.33 beating analyst models by 34%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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 most recent consensus for American Axle & Manufacturing Holdings from six analysts is for revenues of US$5.39b in 2021 which, if met, would be a solid 14% increase on its sales over the past 12 months. American Axle & Manufacturing Holdings is also expected to turn profitable, with statutory earnings of US$1.18 per share. Before this earnings report, the analysts had been forecasting revenues of US$5.38b and earnings per share (EPS) of US$1.16 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.
There were no changes to revenue or earnings estimates or the price target of US$11.28, suggesting that the company has met expectations in its recent result. 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 American Axle & Manufacturing Holdings, with the most bullish analyst valuing it at US$14.50 and the most bearish at US$7.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the American Axle & Manufacturing Holdings' past performance and to peers in the same industry. It's clear from the latest estimates that American Axle & Manufacturing Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 7.1% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that American Axle & Manufacturing Holdings is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.
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. At Simply Wall St, we have a full range of analyst estimates for American Axle & Manufacturing Holdings going out to 2023, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 1 warning sign for American Axle & Manufacturing Holdings that you need to be mindful 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.