ABL Group ASA Just Missed EPS By 29%: Here's What Analysts Think Will Happen Next

ABL Group ASA (OB:ABL) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Statutory earnings per share fell badly short of expectations, coming in at US$0.07, some 29% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$251m. 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.

See our latest analysis for ABL Group

Taking into account the latest results, the current consensus from ABL Group's twin analysts is for revenues of US$288.3m in 2024. This would reflect a decent 15% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 50% to US$0.098. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$293.6m and earnings per share (EPS) of US$0.14 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

The average price target fell 10% to kr16.94, with reduced earnings forecasts clearly tied to a lower valuation estimate.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ABL Group's past performance and to peers in the same industry. We would highlight that ABL Group's revenue growth is expected to slow, with the forecast 15% annualised growth rate until the end of 2024 being well below the historical 35% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.0% per year. So it's pretty clear that, while ABL Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 ABL Group's future valuation.

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

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for ABL Group (1 can't be ignored) you should be aware of.

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.