Volvo Car AB (publ.) Just Reported A Surprise Loss: Here's What Analysts Think Will Happen Next

Last week saw the newest interim earnings release from Volvo Car AB (publ.) (STO:VOLCAR B), an important milestone in the company's journey to build a stronger business. The results don't look great, especially considering that the analysts had been forecasting a profit and Volvo Car AB (publ.) delivered a statutory loss of kr2.12 per share. Revenues of kr176b did beat expectations by 3.4% though. 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.

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Taking into account the latest results, the eleven analysts covering Volvo Car AB (publ.) provided consensus estimates of kr362.7b revenue in 2025, which would reflect a noticeable 4.9% decline over the past 12 months. Statutory earnings per share are predicted to soar 123% to kr0.30. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr359.0b and earnings per share (EPS) of kr2.61 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

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

It might be a surprise to learn that the consensus price target was broadly unchanged at kr17.76, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Volvo Car AB (publ.), with the most bullish analyst valuing it at kr20.10 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 9.5% by the end of 2025. This indicates a significant reduction from annual growth of 10% 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. It's pretty clear that Volvo Car AB (publ.)'s revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Volvo Car AB (publ.). 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 kr17.76, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Volvo Car AB (publ.) analysts - going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Volvo Car AB (publ.) , and understanding it should be part of your investment process.

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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.