It's been a pretty great week for Ardagh Metal Packaging S.A. (NYSE:AMBP) shareholders, with its shares surging 16% to US$4.05 in the week since its latest quarterly results. It was a pretty bad result overall; while revenues were in line with expectations at US$1.1b, statutory losses exploded to US$0.03 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the most recent consensus for Ardagh Metal Packaging from six analysts is for revenues of US$4.99b in 2024. If met, it would imply a satisfactory 3.4% increase on its revenue over the past 12 months. Earnings are expected to improve, with Ardagh Metal Packaging forecast to report a statutory profit of US$0.042 per share. In the lead-up to this report, the analysts had been modelling revenues of US$4.97b and earnings per share (EPS) of US$0.052 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
The consensus price target held steady at US$3.93, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values Ardagh Metal Packaging at US$5.00 per share, while the most bearish prices it at US$3.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Ardagh Metal Packaging's revenue growth is expected to slow, with the forecast 4.6% annualised growth rate until the end of 2024 being well below the historical 9.7% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.0% per year. Even after the forecast slowdown in growth, it seems obvious that Ardagh Metal Packaging is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Ardagh Metal Packaging. Long-term earnings power is much more important than next year's profits. We have forecasts for Ardagh Metal Packaging going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Ardagh Metal Packaging that you should be aware of.
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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.