Kesko Oyj Just Missed Earnings - But Analysts Have Updated Their Models

Last week, you might have seen that Kesko Oyj (HEL:KESKOB) released its second-quarter result to the market. The early response was not positive, with shares down 2.0% to €16.38 in the past week. Revenues were in line with forecasts, at €3.2b, although statutory earnings per share came in 17% below what the analysts expected, at €0.26 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Kesko Oyj

Taking into account the latest results, Kesko Oyj's six analysts currently expect revenues in 2024 to be €11.8b, approximately in line with the last 12 months. Statutory earnings per share are expected to dip 3.0% to €1.04 in the same period. Before this earnings report, the analysts had been forecasting revenues of €11.8b and earnings per share (EPS) of €1.10 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.

The consensus price target held steady at €16.54, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Kesko Oyj, with the most bullish analyst valuing it at €18.20 and the most bearish at €12.50 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.

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. We can infer from the latest estimates that forecasts expect a continuation of Kesko Oyj'shistorical trends, as the 2.4% annualised revenue growth to the end of 2024 is roughly in line with the 2.7% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 4.3% annually. So although Kesko Oyj is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Kesko Oyj. Long-term earnings power is much more important than next year's profits. We have forecasts for Kesko Oyj going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Kesko Oyj that we have uncovered.

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

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