Odfjell SE (OB:ODF) Released Earnings Last Week And Analysts Lifted Their Price Target To kr160

Odfjell SE (OB:ODF) shareholders are probably feeling a little disappointed, since its shares fell 5.8% to kr138 in the week after its latest yearly results. Odfjell reported in line with analyst predictions, delivering revenues of US$1.2b and statutory earnings per share of US$2.57, suggesting the business is executing well and in line with its plan. 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.

View our latest analysis for Odfjell

After the latest results, the five analysts covering Odfjell are now predicting revenues of US$1.28b in 2024. If met, this would reflect a reasonable 6.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 24% to US$3.19. In the lead-up to this report, the analysts had been modelling revenues of US$1.26b and earnings per share (EPS) of US$2.97 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 11% to kr160, suggesting that higher earnings estimates flow through to the stock's valuation as well. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Odfjell, with the most bullish analyst valuing it at kr180 and the most bearish at kr134 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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 Odfjell's revenue growth is expected to slow, with the forecast 6.8% annualised growth rate until the end of 2024 being well below the historical 9.7% 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 0.1% annually. So it's pretty clear that, while Odfjell's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Odfjell following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than 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 in mind, we wouldn't be too quick to come to a conclusion on Odfjell. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Odfjell going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with Odfjell .

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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.