kr12.84: That's What Analysts Think ABL Group ASA (OB:ABL) Is Worth After Its Latest Results

It's been a mediocre week for ABL Group ASA (OB:ABL) shareholders, with the stock dropping 13% to kr10.00 in the week since its latest second-quarter results. It was a curious result overall, with revenues coming in 7.2% below what the analysts had expected, at US$69m. The company broke even in terms of statutory earnings per share (EPS). 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for ABL Group

Taking into account the latest results, the most recent consensus for ABL Group from two analysts is for revenues of US$302.7m in 2024. If met, it would imply a meaningful 9.8% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to plummet 22% to US$0.051 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$288.5m and earnings per share (EPS) of US$0.097 in 2024. While next year's revenue estimates increased, there was also a large cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

The analysts also cut ABL Group's price target 16% to kr12.84, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in revenue.

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 21% annualised growth rate until the end of 2024 being well below the historical 33% 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) 11% 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, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

It is also worth noting that we have found 2 warning signs for ABL Group that you need to take into consideration.

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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.