Volvo Car AB (publ.) Just Missed EPS By 53%: Here's What Analysts Think Will Happen Next

Volvo Car AB (publ.) (STO:VOLCAR B) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Results showed a clear earnings miss, with kr83b revenue coming in 3.5% lower than what the analystsexpected. Statutory earnings per share (EPS) of kr0.40 missed the mark badly, arriving some 53% below what was expected. 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 Volvo Car AB (publ.) after the latest results.

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Taking into account the latest results, the twelve analysts covering Volvo Car AB (publ.) provided consensus estimates of kr369.7b revenue in 2025, which would reflect a discernible 5.0% decline over the past 12 months. Statutory earnings per share are expected to nosedive 29% to kr3.18 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr378.0b and earnings per share (EPS) of kr4.10 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

View our latest analysis for Volvo Car AB (publ.)

The consensus price target fell 10% to kr18.25, with the weaker earnings outlook clearly leading valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Volvo Car AB (publ.), with the most bullish analyst valuing it at kr23.00 and the most bearish at kr14.00 per share. 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.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 6.7% by the end of 2025. This indicates a significant reduction from annual growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Volvo Car AB (publ.) is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Volvo Car AB (publ.)'s future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Volvo Car AB (publ.) going out to 2027, and you can see them free on our platform here..

You can also see our analysis of Volvo Car AB (publ.)'s Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.