What Does The Future Hold For Aker BioMarine AS (OB:AKBM)? These Analysts Have Been Cutting Their Estimates

The latest analyst coverage could presage a bad day for Aker BioMarine AS (OB:AKBM), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the dual analysts covering Aker BioMarine provided consensus estimates of US$306m revenue in 2024, which would reflect a chunky 9.5% decline on its sales over the past 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of US$0.27 per share this year. Before this latest update, the analysts had been forecasting revenues of US$374m and earnings per share (EPS) of US$0.25 in 2024. It looks like there's been a meaningful change to the consensus view following the recent earnings report, with the analysts making a substantial drop in to revenue forecasts and a modest lift to to this year's earnings estimates.

Check out our latest analysis for Aker BioMarine

The consensus price target increased 35% to US$10.03, with the analysts signalling that the improved earnings outlook is more important to the company's valuation than its revenue. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Aker BioMarine at US$11.20 per share, while the most bearish prices it at US$8.86. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

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. We would highlight that sales are expected to reverse, with a forecast 18% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 7.9% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.9% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Aker BioMarine is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Aker BioMarine going forwards.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com