Earnings Miss: Stora Enso Oyj Missed EPS By 32% And Analysts Are Revising Their Forecasts

Stora Enso Oyj (HEL:STERV) shareholders are probably feeling a little disappointed, since its shares fell 9.6% to €11.45 in the week after its latest quarterly results. Statutory earnings per share fell badly short of expectations, coming in at €0.06, some 32% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at €2.3b. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Stora Enso Oyj

Taking into account the latest results, the current consensus from Stora Enso Oyj's 15 analysts is for revenues of €9.11b in 2024. This would reflect an okay 3.9% increase on its revenue over the past 12 months. Earnings are expected to improve, with Stora Enso Oyj forecast to report a statutory profit of €0.46 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of €9.22b and earnings per share (EPS) of €0.54 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

The consensus price target held steady at €14.09, 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. There are some variant perceptions on Stora Enso Oyj, with the most bullish analyst valuing it at €17.00 and the most bearish at €10.30 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. The analysts are definitely expecting Stora Enso Oyj's growth to accelerate, with the forecast 7.9% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.4% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Stora Enso Oyj is expected to grow much faster than its 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. 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. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Stora Enso Oyj analysts - going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether Stora Enso Oyj's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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