Aker Carbon Capture ASA (OB:ACC) Just Reported And Analysts Have Been Cutting Their Estimates

Shareholders might have noticed that Aker Carbon Capture ASA (OB:ACC) filed its quarterly result this time last week. The early response was not positive, with shares down 4.4% to kr7.04 in the past week. Revenues came in at kr566m, an impressive 30% ahead of analyst forecasts. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Aker Carbon Capture

Following last week's earnings report, Aker Carbon Capture's nine analysts are forecasting 2024 revenues to be kr1.89b, approximately in line with the last 12 months. Losses are expected to be contained, narrowing 15% from last year to kr0.27. Yet prior to the latest earnings, the analysts had been forecasting revenues of kr1.99b and losses of kr0.26 per share in 2024. So it's pretty clear consensus is more negative on Aker Carbon Capture after the new consensus numbers; while the analysts trimmed their revenue estimates, they also administered a moderate increase in per-share loss expectations.

The consensus price target fell 6.5% to kr13.00, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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. Currently, the most bullish analyst values Aker Carbon Capture at kr20.00 per share, while the most bearish prices it at kr7.20. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Aker Carbon Capture's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.3% growth on an annualised basis. This is compared to a historical growth rate of 104% over the past year. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.2% annually. Factoring in the forecast slowdown in growth, it seems obvious that Aker Carbon Capture is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Aker Carbon Capture. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Aker Carbon Capture's future valuation.

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

Even so, be aware that Aker Carbon Capture is showing 1 warning sign in our investment analysis , 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.