The Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) Analysts Have Been Trimming Their Sales Forecasts
The latest analyst coverage could presage a bad day for Schnitzer Steel Industries, Inc. (NASDAQ:SCHN), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
Following the latest downgrade, the current consensus, from the three analysts covering Schnitzer Steel Industries, is for revenues of US$2.9b in 2023, which would reflect a not inconsiderable 15% reduction in Schnitzer Steel Industries' sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$3.4b in 2023. The consensus view seems to have become more pessimistic on Schnitzer Steel Industries, noting the measurable cut to revenue estimates in this update.
See our latest analysis for Schnitzer Steel Industries
We'd point out that there was no major changes to their price target of US$57.50, suggesting the latest estimates were not enough to shift their view on the value of the business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Schnitzer Steel Industries analyst has a price target of US$76.00 per share, while the most pessimistic values it at US$39.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 12% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 9.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 0.7% annually for the foreseeable future. The forecasts do look bearish for Schnitzer Steel Industries, since they're expecting it to shrink faster than the industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Schnitzer Steel Industries next year. Analysts also expect revenues to shrink faster than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Schnitzer Steel Industries after today.
Hungry for more information? We have estimates for Schnitzer Steel Industries from its three analysts out until 2024, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading 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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