Topdanmark A/S Just Missed Earnings - But Analysts Have Updated Their Models

As you might know, Topdanmark A/S (CPH:TOP) recently reported its yearly numbers. Topdanmark beat revenue expectations by 2.6%, at kr.10b. Statutory earnings per share (EPS) came in at kr.11.80, some 7.6% short of analyst estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Topdanmark

Taking into account the latest results, the current consensus from Topdanmark's four analysts is for revenues of kr.11.4b in 2024. This would reflect a notable 9.0% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 28% to kr.15.16. Before this earnings report, the analysts had been forecasting revenues of kr.11.3b and earnings per share (EPS) of kr.15.64 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at kr.323, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Topdanmark, with the most bullish analyst valuing it at kr.405 and the most bearish at kr.280 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Topdanmark is forecast to grow faster in the future than it has in the past, with revenues expected to display 9.0% annualised growth until the end of 2024. If achieved, this would be a much better result than the 22% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.4% annually. So it looks like Topdanmark is expected to grow at about the same rate as the wider industry.

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. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at kr.323, 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 Topdanmark. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Topdanmark going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for Topdanmark that you should be aware of.

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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.