Kesko Oyj Just Missed EPS By 7.4%: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Kesko Oyj (HEL:KESKOB) released its quarterly result to the market. The early response was not positive, with shares down 5.8% to €19.27 in the past week. It looks like the results were a bit of a negative overall. While revenues of €3.2b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 7.4% to hit €0.29 per share. 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.

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Following the latest results, Kesko Oyj's six analysts are now forecasting revenues of €12.4b in 2025. This would be a reasonable 2.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 16% to €1.10. In the lead-up to this report, the analysts had been modelling revenues of €12.4b and earnings per share (EPS) of €1.13 in 2025. 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 minor downgrade to their earnings per share forecasts.

Check out our latest analysis for Kesko Oyj

The consensus price target held steady at €20.10, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Kesko Oyj analyst has a price target of €22.00 per share, while the most pessimistic values it at €18.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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 Kesko Oyj's rate of growth is expected to accelerate meaningfully, with the forecast 5.9% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 2.4% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 4.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Kesko Oyj is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Kesko Oyj. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Kesko 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.