Earnings Release: Here's Why Analysts Cut Their Ilkka Oyj (HEL:ILKKA2) Price Target To €3.50

Last week, you might have seen that Ilkka Oyj (HEL:ILKKA2) released its quarterly result to the market. The early response was not positive, with shares down 2.3% to €3.03 in the past week. Ilkka Oyj reported in line with analyst predictions, delivering revenues of €14m and statutory earnings per share of €0.19, suggesting the business is executing well and in line with its plan. Following the result, the analyst has 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 analyst is expecting for next year.

Check out our latest analysis for Ilkka Oyj

Following last week's earnings report, Ilkka Oyj's sole analyst are forecasting 2024 revenues to be €54.4m, approximately in line with the last 12 months. Statutory per share are forecast to be €0.19, approximately in line with the last 12 months. In the lead-up to this report, the analyst had been modelling revenues of €54.5m and earnings per share (EPS) of €0.18 in 2024. So the consensus seems to have become somewhat more optimistic on Ilkka Oyj's earnings potential following these results.

The consensus price target fell 5.4% to €3.50, suggesting the increase in earnings forecasts was not enough to offset other the analyst concerns.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ilkka Oyj's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.04% by the end of 2024. This indicates a significant reduction from annual growth of 9.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Ilkka Oyj is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Ilkka Oyj's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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. We have analyst estimates for Ilkka Oyj going out as far as 2026, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Ilkka Oyj (2 are significant!) that you need to take into consideration.

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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.