It's been a pretty great week for MRC Global Inc. (NYSE:MRC) shareholders, with its shares surging 12% to US$12.06 in the week since its latest full-year results. MRC Global reported US$3.4b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.05 beat expectations, being 8.2% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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, MRC Global's seven analysts currently expect revenues in 2024 to be US$3.40b, approximately in line with the last 12 months. Per-share earnings are expected to increase 3.2% to US$1.10. In the lead-up to this report, the analysts had been modelling revenues of US$3.66b and earnings per share (EPS) of US$1.19 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
The analysts made no major changes to their price target of US$14.50, suggesting the downgrades are not expected to have a long-term impact on MRC Global's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic MRC Global analyst has a price target of US$17.00 per share, while the most pessimistic values it at US$13.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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 also point out that the forecast 0.5% annualised revenue decline to the end of 2024 is better than the historical trend, which saw revenues shrink 3.7% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.3% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect MRC Global to suffer worse 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple MRC Global analysts - going out to 2026, and you can see them free on our platform here.
You can also see whether MRC Global is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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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.
