Results: Odfjell Drilling Ltd. Beat Earnings Expectations And Analysts Now Have New Forecasts

Investors in Odfjell Drilling Ltd. (OB:ODL) had a good week, as its shares rose 2.6% to close at kr51.80 following the release of its third-quarter results. Revenues were US$187m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.08 were also better than expected, beating analyst predictions by 12%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Odfjell Drilling

Taking into account the latest results, the consensus forecast from Odfjell Drilling's four analysts is for revenues of US$844.1m in 2025. This reflects a meaningful 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 133% to US$0.71. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$855.6m and earnings per share (EPS) of US$0.73 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of kr81.21, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Odfjell Drilling analyst has a price target of kr100 per share, while the most pessimistic values it at kr70.14. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Odfjell Drilling's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 8.3% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 3.4% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 4.9% per year. Not only are Odfjell Drilling's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Odfjell Drilling. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Odfjell Drilling going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with Odfjell Drilling .

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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.