Results: Kongsberg Gruppen ASA Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a good week for Kongsberg Gruppen ASA (OB:KOG) shareholders, because the company has just released its latest second-quarter results, and the shares gained 5.0% to kr143. Revenues were kr6.0b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at kr1.47, an impressive 108% ahead of estimates. 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.

Check out our latest analysis for Kongsberg Gruppen

Following the recent earnings report, the consensus from five analysts covering Kongsberg Gruppen is for revenues of kr25.9b in 2020, implying a discernible 5.0% decline in sales compared to the last 12 months. Per-share earnings are expected to climb 18% to kr6.35. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr25.9b and earnings per share (EPS) of kr5.48 in 2020. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the solid gain to earnings per share expectations following these results.

There's been no major changes to the consensus price target of kr159, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. Currently, the most bullish analyst values Kongsberg Gruppen at kr170 per share, while the most bearish prices it at kr150. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with the forecast 5.0% revenue decline a notable change from historical growth of 7.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Kongsberg Gruppen 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 Kongsberg Gruppen's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Kongsberg Gruppen's revenues are expected to perform worse than the wider industry. The consensus price target held steady at kr159, 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. At Simply Wall St, we have a full range of analyst estimates for Kongsberg Gruppen going out to 2022, and you can see them free on our platform here..

You can also see our analysis of Kongsberg Gruppen's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. 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.
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