Aker BioMarine AS (OB:AKBM) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Aker BioMarine AS (OB:AKBM) shareholders are probably feeling a little disappointed, since its shares fell 7.5% to kr114 in the week after its latest full-year results. It was a pretty bad result overall; while revenues were in line with expectations at US$289m, statutory losses exploded to US$0.08 per share. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Aker BioMarine

Taking into account the latest results, the most recent consensus for Aker BioMarine from three analysts is for revenues of US$330.4m in 2021 which, if met, would be a meaningful 15% increase on its sales over the past 12 months. Aker BioMarine is also expected to turn profitable, with statutory earnings of US$0.26 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$390.2m and earnings per share (EPS) of US$0.45 in 2021. Indeed, we can see that the analysts are a lot more bearish about Aker BioMarine's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 6.1% to US$16.10. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Aker BioMarine, with the most bullish analyst valuing it at US$147 and the most bearish at US$121 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Aker BioMarine's revenue growth is expected to slow, with forecast 15% increase next year well below the historical 24%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.6% next year. Even after the forecast slowdown in growth, it seems obvious that Aker BioMarine is also expected to grow faster than the wider industry.

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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Aker BioMarine going out to 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Aker BioMarine you should know about.

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This article by Simply Wall St is general in nature. 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.
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