Rockwool A/S (CPH:ROCK B) Just Recorded An Earnings Miss And Analysts Are Updating Their Numbers

Rockwool A/S (CPH:ROCK B) just released its latest quarterly report and things are not looking great. Rockwool missed analyst forecasts, with revenues of €988m and statutory earnings per share (EPS) of €0.60, falling short by 5.0% and 5.0% respectively. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following last week's earnings report, Rockwool's nine analysts are forecasting 2025 revenues to be €3.90b, approximately in line with the last 12 months. Statutory earnings per share are forecast to sink 12% to €2.23 in the same period. Before this earnings report, the analysts had been forecasting revenues of €3.98b and earnings per share (EPS) of €2.44 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

View our latest analysis for Rockwool

It'll come as no surprise then, to learn that the analysts have cut their price target 5.3% to kr.299. 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. There are some variant perceptions on Rockwool, with the most bullish analyst valuing it at kr.360 and the most bearish at kr.250 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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. It's pretty clear that there is an expectation that Rockwool's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.5% growth on an annualised basis. This is compared to a historical growth rate of 8.3% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.4% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Rockwool.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Rockwool going out to 2027, and you can see them free on our platform here.

You can also see our analysis of Rockwool's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.