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Last week, you might have seen that Steel & Tube Holdings Limited (NZSE:STU) released its full-year result to the market. The early response was not positive, with shares down 2.9% to NZ$1.02 in the past week. Statutory earnings per share fell badly short of expectations, coming in at NZ$0.016, some 43% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at NZ$479m. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Steel & Tube Holdings
Taking into account the latest results, Steel & Tube Holdings' twin analysts currently expect revenues in 2025 to be NZ$477.2m, approximately in line with the last 12 months. Per-share earnings are expected to surge 81% to NZ$0.029. Before this earnings report, the analysts had been forecasting revenues of NZ$498.2m and earnings per share (EPS) of NZ$0.066 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.
What's most unexpected is that the consensus price target rose 6.0% to NZ$1.16, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 0.4% annualised decline to the end of 2025. That is a notable change from historical growth of 5.1% 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 1.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Steel & Tube Holdings is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Steel & Tube Holdings. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.