Nokian Renkaat Oyj (HEL:TYRES) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates

It's been a mediocre week for Nokian Renkaat Oyj (HEL:TYRES) shareholders, with the stock dropping 12% to €6.19 in the week since its latest quarterly results. The results don't look great, especially considering that statutory losses grew 123% to€0.27 per share. Revenues of €270m did beat expectations by 3.9%, but it looks like a bit of a cold comfort. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following the latest results, Nokian Renkaat Oyj's nine analysts are now forecasting revenues of €1.43b in 2025. This would be a solid 8.5% improvement in revenue compared to the last 12 months. Nokian Renkaat Oyj is also expected to turn profitable, with statutory earnings of €0.22 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of €1.41b and earnings per share (EPS) of €0.15 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the massive increase in earnings per share expectations following these results.

See our latest analysis for Nokian Renkaat Oyj

There's been no major changes to the consensus price target of €6.62, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Nokian Renkaat Oyj, with the most bullish analyst valuing it at €9.00 and the most bearish at €5.50 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 Nokian Renkaat Oyj is forecast to grow faster in the future than it has in the past, with revenues expected to display 11% annualised growth until the end of 2025. If achieved, this would be a much better result than the 4.5% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 2.4% per year. So it looks like Nokian Renkaat Oyj is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Nokian Renkaat Oyj's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. 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.

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 estimates - from multiple Nokian Renkaat Oyj analysts - going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Nokian Renkaat Oyj 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.