Elkem ASA Just Missed EPS By 51%: Here's What Analysts Think Will Happen Next

It's shaping up to be a tough period for Elkem ASA (OB:ELK), which a week ago released some disappointing third-quarter results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at kr8.1b, statutory earnings missed forecasts by an incredible 51%, coming in at just kr0.15 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Elkem after the latest results.

Check out our latest analysis for Elkem

Taking into account the latest results, the consensus forecast from Elkem's six analysts is for revenues of kr37.3b in 2025. This reflects a notable 18% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 4,148% to kr3.08. In the lead-up to this report, the analysts had been modelling revenues of kr38.4b and earnings per share (EPS) of kr3.14 in 2025. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The consensus has reconfirmed its price target of kr23.92, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Elkem's market value. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Elkem analyst has a price target of kr28.00 per share, while the most pessimistic values it at kr20.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Elkem's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 11% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Elkem is expected to grow much faster than its 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Elkem going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Elkem has 3 warning signs (and 1 which is concerning) we think you should know about.

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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.