DFDS A/S Just Missed EPS By 18%: Here's What Analysts Think Will Happen Next

DFDS A/S (CPH:DFDS) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Statutory earnings per share of kr.5.13 unfortunately missed expectations by 18%, although it was encouraging to see revenues of kr.7.6b exceed expectations by 2.6%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on DFDS after the latest results.

See our latest analysis for DFDS

Following the latest results, DFDS' four analysts are now forecasting revenues of kr.29.8b in 2024. This would be a credible 4.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to decline 15% to kr.16.50 in the same period. Before this earnings report, the analysts had been forecasting revenues of kr.29.7b and earnings per share (EPS) of kr.21.03 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.

The consensus price target held steady at kr.340, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic DFDS analyst has a price target of kr.365 per share, while the most pessimistic values it at kr.320. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the DFDS' past performance and to peers in the same industry. It's pretty clear that there is an expectation that DFDS' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 8.3% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.2% annually. So it's pretty clear that, while DFDS' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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 major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at kr.340, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple DFDS analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that DFDS is showing 3 warning signs in our investment analysis , and 1 of those is a bit concerning...

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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.