Kongsberg Gruppen ASA Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

It's been a good week for Kongsberg Gruppen ASA (OB:KOG) shareholders, because the company has just released its latest first-quarter results, and the shares gained 4.9% to kr792. It looks like a credible result overall - although revenues of kr11b were in line with what the analysts predicted, Kongsberg Gruppen surprised by delivering a statutory profit of kr6.36 per share, a notable 14% above expectations. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Kongsberg Gruppen

After the latest results, the seven analysts covering Kongsberg Gruppen are now predicting revenues of kr47.1b in 2024. If met, this would reflect a decent 9.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 11% to kr25.82. Before this earnings report, the analysts had been forecasting revenues of kr46.5b and earnings per share (EPS) of kr25.26 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 10% to kr798, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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 Kongsberg Gruppen, with the most bullish analyst valuing it at kr875 and the most bearish at kr545 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 13% growth on an annualised basis. That is in line with its 15% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 11% annually. So although Kongsberg Gruppen is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Kongsberg Gruppen following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Kongsberg Gruppen. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Kongsberg Gruppen analysts - going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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.