Results: Ørsted A/S Beat Earnings Expectations And Analysts Now Have New Forecasts

Last week, you might have seen that Ørsted A/S (CPH:ORSTED) released its first-quarter result to the market. The early response was not positive, with shares down 5.6% to kr.253 in the past week. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at kr.21b, statutory earnings beat expectations by a notable 84%, coming in at kr.10.60 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ørsted after the latest results.

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Taking into account the latest results, the current consensus from Ørsted's 19 analysts is for revenues of kr.74.3b in 2025. This would reflect a reasonable 2.4% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 848% to kr.25.46. Before this earnings report, the analysts had been forecasting revenues of kr.75.9b and earnings per share (EPS) of kr.22.88 in 2025. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the substantial gain in to the earnings per share numbers.

See our latest analysis for Ørsted

There's been no real change to the average price target of kr.333, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Ørsted analyst has a price target of kr.430 per share, while the most pessimistic values it at kr.211. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. It's pretty clear that there is an expectation that Ørsted's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.2% growth on an annualised basis. This is compared to a historical growth rate of 5.2% 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 0.1% annually. Even after the forecast slowdown in growth, it seems obvious that Ørsted is also expected to grow faster than the wider 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 Ørsted following these results. They also downgraded Ørsted's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 forecasts for Ørsted going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Ørsted that you need to be mindful 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.