Aker BP ASA Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

As you might know, Aker BP ASA (OB:AKRBP) just kicked off its latest first-quarter results with some very strong numbers. Aker BP beat earnings, with revenues hitting US$3.1b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 19%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 Aker BP

Following the recent earnings report, the consensus from 17 analysts covering Aker BP is for revenues of US$12.7b in 2024. This implies a measurable 5.6% decline in revenue compared to the last 12 months. Per-share earnings are expected to ascend 20% to US$3.19. Before this earnings report, the analysts had been forecasting revenues of US$11.9b and earnings per share (EPS) of US$3.07 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Despite these upgrades,the analysts have not made any major changes to their price target of kr320, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Aker BP at kr415 per share, while the most bearish prices it at kr230. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Aker BP shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Aker BP's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 7.3% by the end of 2024. This indicates a significant reduction from annual growth of 38% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 4.6% annually for the foreseeable future. The forecasts do look bearish for Aker BP, since they're expecting it to shrink faster than the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Aker BP's earnings potential next year. They also upgraded their estimates, with revenue apparently performing well, although it is expected to lag the wider industry this year. The consensus price target held steady at kr320, with the latest estimates not enough to have an impact on their price targets.

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

It is also worth noting that we have found 2 warning signs for Aker BP (1 shouldn't be ignored!) 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.