In This Article:
Allegheny Technologies Incorporated (NYSE:ATI) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Results overall were solid, with revenues arriving 6.7% better than analyst forecasts at US$693m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.06 per share, were 6.7% smaller than the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for Allegheny Technologies
Following the recent earnings report, the consensus from six analysts covering Allegheny Technologies is for revenues of US$2.74b in 2021, implying an uneasy 8.1% decline in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 100% to US$0.05. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$2.74b and losses of US$0.37 per share in 2021. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading revenues and making a very promising decrease in losses per share in particular.
The average price target rose 8.9% to US$20.36, with the analysts signalling that the forecast reduction in losses would be a positive for the stock's valuation. 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 Allegheny Technologies, with the most bullish analyst valuing it at US$26.00 and the most bearish at US$10.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 11% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 3.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.2% annually for the foreseeable future. It's pretty clear that Allegheny Technologies' revenues are expected to perform substantially worse than the wider industry.