Finnair Oyj Just Missed EPS By 44%: Here's What Analysts Think Will Happen Next

It's been a mediocre week for Finnair Oyj (HEL:FIA1S) shareholders, with the stock dropping 10% to €2.33 in the week since its latest quarterly results. It looks like a pretty bad result, all things considered. Although revenues of €766m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 44% to hit €0.09 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Finnair Oyj

Taking into account the latest results, the consensus forecast from Finnair Oyj's three analysts is for revenues of €3.08b in 2024. This reflects an okay 2.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to decrease 4.6% to €0.30 in the same period. In the lead-up to this report, the analysts had been modelling revenues of €3.10b and earnings per share (EPS) of €0.41 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

The average price target fell 12% to €3.17, with reduced earnings forecasts clearly tied to a lower valuation estimate. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Finnair Oyj analyst has a price target of €4.00 per share, while the most pessimistic values it at €2.50. 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. We can infer from the latest estimates that forecasts expect a continuation of Finnair Oyj'shistorical trends, as the 4.9% annualised revenue growth to the end of 2024 is roughly in line with the 5.8% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.5% per year. So although Finnair Oyj is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Finnair Oyj's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Finnair Oyj. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Finnair Oyj going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 3 warning signs for Finnair Oyj you should be aware of, and 1 of them makes us a bit uncomfortable.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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