Orkla ASA Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

It's been a good week for Orkla ASA (OB:ORK) shareholders, because the company has just released its latest first-quarter results, and the shares gained 6.6% to kr79.80. Orkla reported kr17b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of kr1.47 beat expectations, being 6.3% higher than what the analysts expected. 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.

Check out our latest analysis for Orkla

Taking into account the latest results, Orkla's six analysts currently expect revenues in 2024 to be kr69.5b, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 4.4% to kr5.64. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr69.5b and earnings per share (EPS) of kr5.77 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at kr81.71, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Orkla analyst has a price target of kr90.00 per share, while the most pessimistic values it at kr74.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Orkla is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Orkla's past performance and to peers in the same industry. We would highlight that Orkla's revenue growth is expected to slow, with the forecast 1.5% annualised growth rate until the end of 2024 being well below the historical 11% 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 8.0% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Orkla.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Orkla. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at kr81.71, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Orkla going out to 2026, and you can see them free on our platform here.

You can also view our analysis of Orkla's balance sheet, and whether we think Orkla is carrying too much debt, for free on our platform here.

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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.