Shareholders of Per Aarsleff Holding A/S (CPH:PAAL B) will be pleased this week, given that the stock price is up 13% to kr.309 following its latest full-year results. It looks like the results were a bit of a negative overall. While revenues of kr.13b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.7% to hit kr.18.63 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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, the consensus forecast from Per Aarsleff Holding's dual analysts is for revenues of kr.13.9b in 2021, which would reflect an okay 4.8% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 25% to kr.23.05. In the lead-up to this report, the analysts had been modelling revenues of kr.13.4b and earnings per share (EPS) of kr.21.73 in 2021. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
It will come as no surprise to learn that the analysts have increased their price target for Per Aarsleff Holding 6.0% to kr.308on the back of these upgrades.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Per Aarsleff Holding's revenue growth is expected to slow, with forecast 4.8% increase next year well below the historical 6.7%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.2% next year. So it's pretty clear that, while Per Aarsleff Holding's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Per Aarsleff Holding following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Per Aarsleff Holding going out as far as 2025, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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