Earnings Miss: Ternium S.A. Missed EPS By 19% And Analysts Are Revising Their Forecasts

It's been a sad week for Ternium S.A. (NYSE:TX), who've watched their investment drop 10% to US$48.64 in the week since the company reported its third-quarter result. It was not a great result overall. While revenues of US$4.6b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 19% to hit US$1.42 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the current consensus from Ternium's 13 analysts is for revenues of US$18.4b in 2027. This would reflect a meaningful 10% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 53% to US$7.46. In the lead-up to this report, the analysts had been modelling revenues of US$18.4b and earnings per share (EPS) of US$7.46 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for Ternium

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$61.50. 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 Ternium at US$78.00 per share, while the most bearish prices it at US$40.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Ternium's growth to accelerate, with the forecast 8.1% annualised growth to the end of 2027 ranking favourably alongside historical growth of 0.1% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Ternium is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. 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 Ternium. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Ternium analysts - going out to 2028, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Ternium you should be aware of.

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