UPM-Kymmene Oyj Just Missed EPS By 15%: Here's What Analysts Think Will Happen Next

It's shaping up to be a tough period for UPM-Kymmene Oyj (HEL:UPM), which a week ago released some disappointing third-quarter results that could have a notable impact on how the market views the stock. UPM-Kymmene Oyj missed earnings this time around, with €2.5b revenue coming in 3.6% below what the analysts had modelled. Statutory earnings per share (EPS) of €0.44 also fell short of expectations by 15%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for UPM-Kymmene Oyj

Taking into account the latest results, the current consensus from UPM-Kymmene Oyj's 15 analysts is for revenues of €10.8b in 2025. This would reflect a modest 5.5% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 76% to €2.30. Yet prior to the latest earnings, the analysts had been anticipated revenues of €10.9b and earnings per share (EPS) of €2.38 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 small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at €33.39, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. The most optimistic UPM-Kymmene Oyj analyst has a price target of €43.50 per share, while the most pessimistic values it at €27.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 UPM-Kymmene Oyj's growth to accelerate, with the forecast 4.3% annualised growth to the end of 2025 ranking favourably alongside historical growth of 3.4% 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 UPM-Kymmene 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 UPM-Kymmene Oyj. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at €33.39, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple UPM-Kymmene Oyj analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - UPM-Kymmene Oyj has 2 warning signs (and 1 which doesn't sit too well with us) 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.