Earnings Release: Here's Why Analysts Cut Their Fodelia Oyj (HEL:FODELIA) Price Target To €8.20

The annual results for Fodelia Oyj (HEL:FODELIA) were released last week, making it a good time to revisit its performance. It was an okay report, and revenues came in at €34m, approximately in line with analyst estimates leading up to the results announcement. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is 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 analyst has changed their earnings models, following these results.

View our latest analysis for Fodelia Oyj

Taking into account the latest results, the consensus forecast from Fodelia Oyj's sole analyst is for revenues of €41.3m in 2022, which would reflect a substantial 21% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 173% to €0.24. Yet prior to the latest earnings, the analyst had been anticipated revenues of €43.4m and earnings per share (EPS) of €0.39 in 2022. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

It'll come as no surprise then, to learn that the analyst has cut their price target 18% to €8.20.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Fodelia Oyj's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Fodelia Oyj's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 21% growth on an annualised basis. This is compared to a historical growth rate of 31% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.9% annually. So it's pretty clear that, while Fodelia Oyj's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Fodelia Oyj. They also downgraded their revenue estimates, although industry data suggests that Fodelia Oyj's revenues are expected to grow faster than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

You still need to take note of risks, for example - Fodelia Oyj has 4 warning signs (and 2 which make us uncomfortable) we think you should know about.

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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.