Kempower Oyj (HEL:KEMPOWR) Analysts Are Reducing Their Forecasts For This Year

The analysts covering Kempower Oyj (HEL:KEMPOWR) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the latest consensus from Kempower Oyj's six analysts is for revenues of €393m in 2024, which would reflect a major 38% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to be €0.60, approximately in line with the last 12 months. Previously, the analysts had been modelling revenues of €439m and earnings per share (EPS) of €0.89 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

View our latest analysis for Kempower Oyj

The consensus price target fell 14% to kr461, with the weaker earnings outlook clearly leading analyst valuation estimates. 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 Kempower Oyj analyst has a price target of kr757 per share, while the most pessimistic values it at kr319. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kempower Oyj's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Kempower Oyj's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 38% growth on an annualised basis. This is compared to a historical growth rate of 54% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.2% per year. So it's pretty clear that, while Kempower Oyj's 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 analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Kempower Oyj going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.