DFDS A/S Just Missed EPS By 8.9%: Here's What Analysts Think Will Happen Next

DFDS A/S (CPH:DFDS) shareholders are probably feeling a little disappointed, since its shares fell 7.4% to kr.215 in the week after its latest yearly results. Revenues of kr.27b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at kr.26.58, missing estimates by 8.9%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for DFDS

After the latest results, the four analysts covering DFDS are now predicting revenues of kr.28.9b in 2024. If met, this would reflect a reasonable 5.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to reduce 9.4% to kr.24.17 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr.28.7b and earnings per share (EPS) of kr.29.69 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 substantial drop in EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at kr.367, 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 DFDS, with the most bullish analyst valuing it at kr.451 and the most bearish at kr.285 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await DFDS shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. 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 5.7% growth on an annualised basis. This is compared to a historical growth rate of 15% 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 revenue shrink 0.5% per year. So it's clear that despite the slowdown in growth, DFDS is still expected to grow meaningfully 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 DFDS. On the plus side, they made no changes to their revenue estimates - and they expect it to perform better than the wider industry. The consensus price target held steady at kr.367, 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 DFDS. 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 DFDS going out to 2026, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with DFDS , and understanding this should be part of your investment process.

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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.