Nucor earnings beat by $0.08, revenue fell short of estimates
On Wednesday, Deutsche Bank adjusted its outlook on Essentra Plc (LON:ESNT:LN) shares, a supplier of specialty plastic, fiber, foam, and packaging products. The firm's analyst revised the price target downward to £2.00 from the previous £2.40, while still retaining a Buy rating on the stock. The revision comes in response to a mix of market headwinds and financial forecasts.
Essentra has experienced a softening of market conditions across Europe, including Turkey, during August and September, echoing the recent downturn in Purchasing Managers' Index (PMI) metrics. Moreover, recovery in the Americas region is progressing more slowly than anticipated, while the Asia-Pacific (APAC) region's performance aligns with expectations.
These factors have led management to revise their full-year 2024 earnings before interest, taxes, and amortization (EBITA) forecast to £40-42 million, which is significantly below the prior consensus of around £49 million.
Deutsche Bank has also lowered its full-year 2024 revenue forecast for Essentra to £308 million, a 6% decrease from the previously projected £327 million. This adjustment suggests an organic revenue decline of approximately 2% in the second half of 2021, mirroring the performance seen in the first half despite weaker comparative figures. The firm has downgraded its EBITA expectation for the year 2024 to £40 million, which is at the lower end of the company's revised range.
The analyst cited several contributing factors to the revised forecasts, including a roughly £2 million foreign exchange headwind impacting profits. The report also noted the high operational gearing on volume downside, which is consistent with Essentra's historical performance, as a reason for the lowered EBITA prediction. The updated figures reflect the company's current outlook and market challenges as it moves forward.
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