Analysts Are More Bearish On FLSmidth & Co. A/S (CPH:FLS) Than They Used To Be

Market forces rained on the parade of FLSmidth & Co. A/S (CPH:FLS) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

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Following the latest downgrade, the five analysts covering FLSmidth provided consensus estimates of kr.15b revenue in 2025, which would reflect a stressful 25% decline on its sales over the past 12 months. Statutory earnings per share are supposed to plunge 20% to kr.16.36 in the same period. Previously, the analysts had been modelling revenues of kr.19b and earnings per share (EPS) of kr.22.74 in 2025. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for FLSmidth

What's most unexpected is that the consensus price target rose 5.3% to kr.435, 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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 32% by the end of 2025. This indicates a significant reduction from annual growth of 5.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.7% annually for the foreseeable future. It's pretty clear that FLSmidth's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for FLSmidth. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that FLSmidth's revenues are expected to grow slower than the wider market. The increasing price target is not intuitively what we would expect to see, given these downgrades, and we'd suggest shareholders revisit their investment thesis before making a decision.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for FLSmidth going out to 2027, and you can see them 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.