Earnings Miss: Neste Oyj Missed EPS And Analysts Are Revising Their Forecasts

Investors in Neste Oyj (HEL:NESTE) had a good week, as its shares rose 9.3% to close at €19.01 following the release of its quarterly results. Revenues came in 37% better than analyst models predicted, at €4.6b. The company was unable to deliver a profit however, with statutory losses of €0.19 well below the profits that the analysts had forecast. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Neste Oyj

Taking into account the latest results, the current consensus, from the 18 analysts covering Neste Oyj, is for revenues of €21.2b in 2024. This implies a perceptible 2.2% reduction in Neste Oyj's revenue over the past 12 months. Statutory earnings per share are expected to tumble 26% to €0.92 in the same period. In the lead-up to this report, the analysts had been modelling revenues of €19.2b and earnings per share (EPS) of €1.07 in 2024. Although revenue sentiment has improved substantially, the analysts have made a substantial drop in per-share earnings estimates, suggesting that the growth is not without cost.

There's been no major changes to the price target of €24.07, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Neste Oyj, with the most bullish analyst valuing it at €39.00 and the most bearish at €17.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 revenue is expected to reverse, with a forecast 4.4% annualised decline to the end of 2024. That is a notable change from historical growth of 17% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 1.0% per year. So it's pretty clear that Neste Oyj's revenues are expected to shrink faster 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. They also upgraded their estimates, with revenue apparently performing well, although it is expected to lag the wider industry this year. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Neste Oyj going out to 2026, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Neste Oyj (1 is potentially serious) 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