Earnings Miss: Metsä Board Oyj Missed EPS By 29% And Analysts Are Revising Their Forecasts

The analysts might have been a bit too bullish on Metsä Board Oyj (HEL:METSB), given that the company fell short of expectations when it released its third-quarter results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at €499m, statutory earnings missed forecasts by an incredible 29%, coming in at just €0.08 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Metsä Board Oyj

Taking into account the latest results, the consensus forecast from Metsä Board Oyj's six analysts is for revenues of €2.24b in 2025. This reflects a notable 16% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 410% to €0.50. Yet prior to the latest earnings, the analysts had been anticipated revenues of €2.27b and earnings per share (EPS) of €0.58 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target fell 8.9% to €6.59, with the analysts clearly linking lower forecast earnings to the performance of the stock price. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Metsä Board Oyj, with the most bullish analyst valuing it at €9.00 and the most bearish at €5.10 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Metsä Board Oyj's past performance and to peers in the same industry. The analysts are definitely expecting Metsä Board Oyj's growth to accelerate, with the forecast 13% annualised growth to the end of 2025 ranking favourably alongside historical growth of 1.9% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Metsä Board Oyj to grow faster than 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 Metsä Board Oyj. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Metsä Board Oyj analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Metsä Board Oyj is showing 3 warning signs in our investment analysis , and 1 of those can't be ignored...

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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.