Results: Grieg Seafood ASA Confounded Analyst Expectations With A Surprise Profit

Grieg Seafood ASA (OB:GSF) shareholders are probably feeling a little disappointed, since its shares fell 6.4% to kr62.35 in the week after its latest full-year results. Although revenues of kr7.1b were in line with analyst expectations, Grieg Seafood surprised on the earnings front, with an unexpected (statutory) profit of kr2.30 per share a nice improvement on the losses that the analystsforecast. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Grieg Seafood

Taking into account the latest results, the current consensus from Grieg Seafood's six analysts is for revenues of kr7.68b in 2024. This would reflect a meaningful 8.8% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 159% to kr6.00. Before this earnings report, the analysts had been forecasting revenues of kr7.68b and earnings per share (EPS) of kr6.23 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The average price target fell 6.4% to kr70.20, with reduced earnings forecasts clearly tied to a lower valuation estimate. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Grieg Seafood analyst has a price target of kr80.00 per share, while the most pessimistic values it at kr55.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Grieg Seafood's growth to accelerate, with the forecast 8.8% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Grieg Seafood is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Grieg Seafood. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Grieg Seafood's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Grieg Seafood going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Grieg Seafood (including 2 which are concerning) .

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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.