Ørsted A/S Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Investors in Ørsted A/S (CPH:ORSTED) had a good week, as its shares rose 4.5% to close at kr.406 following the release of its quarterly results. Revenues were kr.19b, 31% shy of what the analysts were expecting, although statutory earnings of kr.5.70 per share were roughly in line with what was forecast. 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. 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.

View our latest analysis for Ørsted

After the latest results, the 21 analysts covering Ørsted are now predicting revenues of kr.87.3b in 2024. If met, this would reflect a huge 20% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Ørsted forecast to report a statutory profit of kr.20.29 per share. Before this earnings report, the analysts had been forecasting revenues of kr.88.6b and earnings per share (EPS) of kr.22.02 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at kr.453, 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. There are some variant perceptions on Ørsted, with the most bullish analyst valuing it at kr.560 and the most bearish at kr.360 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ørsted's past performance and to peers in the same industry. It's clear from the latest estimates that Ørsted's rate of growth is expected to accelerate meaningfully, with the forecast 28% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 0.07% per year. So it's clear with the acceleration in growth, Ørsted is 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 Ørsted. 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.453, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Ørsted going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Ørsted 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.