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Earnings Update: Here's Why Analysts Just Lifted Their Lassila & Tikanoja Oyj (HEL:LAT1V) Price Target To €15.00
Last week, you might have seen that Lassila & Tikanoja Oyj (HEL:LAT1V) released its annual result to the market. The early response was not positive, with shares down 8.6% to €14.38 in the past week. Lassila & Tikanoja Oyj reported €752m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of €0.50 beat expectations, being 2.3% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Lassila & Tikanoja Oyj
Taking into account the latest results, the most recent consensus for Lassila & Tikanoja Oyj from two analysts is for revenues of €774.9m in 2021 which, if met, would be an okay 3.1% increase on its sales over the past 12 months. Statutory earnings per share are predicted to surge 67% to €0.84. Yet prior to the latest earnings, the analysts had been anticipated revenues of €773.1m and earnings per share (EPS) of €0.84 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target rose 8.7% to €15.00despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Lassila & Tikanoja Oyj's earnings by assigning a price premium.
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. We would highlight that Lassila & Tikanoja Oyj's revenue growth is expected to slow, with forecast 3.1% increase next year well below the historical 4.4%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.8% next year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Lassila & Tikanoja Oyj.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Lassila & Tikanoja Oyj. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Lassila & Tikanoja Oyj going out as far as 2023, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Lassila & Tikanoja Oyj , and understanding them should be part of your investment process.
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This article by Simply Wall St is general in nature. 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.
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About HLSE:LAT1V
Lassila & Tikanoja Oyj
A service company, provides environmental management, and property and plant support services in Finland, Sweden, and internationally.
Undervalued with moderate growth potential.