Earnings Update: Here's Why Analysts Just Lifted Their Kitron ASA (OB:KIT) Price Target To kr65.00

Investors in Kitron ASA (OB:KIT) had a good week, as its shares rose 8.2% to close at kr66.50 following the release of its second-quarter results. It looks like the results were a bit of a negative overall. While revenues of €171m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.1% to hit €0.05 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Following the latest results, Kitron's four analysts are now forecasting revenues of €698.6m in 2025. This would be a notable 8.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 51% to €0.22. Before this earnings report, the analysts had been forecasting revenues of €681.3m and earnings per share (EPS) of €0.20 in 2025. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

See our latest analysis for Kitron

It will come as no surprise to learn that the analysts have increased their price target for Kitron 15% to kr65.00on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Kitron at kr70.00 per share, while the most bearish prices it at kr60.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 can infer from the latest estimates that forecasts expect a continuation of Kitron'shistorical trends, as the 18% annualised revenue growth to the end of 2025 is roughly in line with the 16% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 16% per year. It's clear that while Kitron's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Kitron's earnings potential next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Kitron going out to 2027, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Kitron that you need to take into consideration.

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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.