NKT A/S Just Missed EPS By 6.2%: Here's What Analysts Think Will Happen Next

Investors in NKT A/S (CPH:NKT) had a good week, as its shares rose 4.2% to close at kr.514 following the release of its annual results. It was a pretty mixed result, with revenues beating expectations to hit €2.6b. Statutory earnings fell 6.2% short of analyst forecasts, reaching €2.10 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for NKT

Taking into account the latest results, the current consensus from NKT's five analysts is for revenues of €2.90b in 2024. This would reflect a meaningful 12% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 54% to €3.10. Yet prior to the latest earnings, the analysts had been anticipated revenues of €2.91b and earnings per share (EPS) of €3.39 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The consensus price target held steady at kr.534, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values NKT at kr.580 per share, while the most bearish prices it at kr.424. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting NKT is an easy business to forecast or the the analysts are all using similar assumptions.

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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 12% growth on an annualised basis. That is in line with its 13% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.3% per year. So although NKT is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for NKT. 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. The consensus price target held steady at kr.534, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on NKT. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple NKT analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for NKT that we have uncovered.

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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.