KONE Oyj (HEL:KNEBV) Just Released Its Second-Quarter Results And Analysts Are Updating Their Estimates

KONE Oyj (HEL:KNEBV) last week reported its latest second-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like the results were a bit of a negative overall. While revenues of €2.8b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.3% to hit €0.50 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for KONE Oyj

Taking into account the latest results, the most recent consensus for KONE Oyj from 19 analysts is for revenues of €11.2b in 2024. If met, it would imply a satisfactory 2.5% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 3.9% to €1.97. In the lead-up to this report, the analysts had been modelling revenues of €11.2b and earnings per share (EPS) of €2.01 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 small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at €49.60, 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. The most optimistic KONE Oyj analyst has a price target of €60.00 per share, while the most pessimistic values it at €32.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that KONE Oyj's rate of growth is expected to accelerate meaningfully, with the forecast 5.2% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.0% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that KONE Oyj is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for KONE Oyj. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at €49.60, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple KONE Oyj analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for KONE 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com