Swedbank AB (publ) Just Recorded A 10% EPS Beat: Here's What Analysts Are Forecasting Next

A week ago, Swedbank AB (publ) (STO:SWED A) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Swedbank beat earnings, with revenues hitting kr18b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 10%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Swedbank

Taking into account the latest results, the 14 analysts covering Swedbank provided consensus estimates of kr70.7b revenue in 2024, which would reflect a measurable 3.5% decline over the past 12 months. Statutory earnings per share are forecast to drop 12% to kr26.96 in the same period. Before this earnings report, the analysts had been forecasting revenues of kr70.6b and earnings per share (EPS) of kr27.31 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of kr236, suggesting that the company has met expectations in its recent result. 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 Swedbank, with the most bullish analyst valuing it at kr259 and the most bearish at kr200 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Swedbank is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 6.8% by the end of 2024. This indicates a significant reduction from annual growth of 12% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 1.2% per year. The forecasts do look bearish for Swedbank, since they're expecting it to shrink faster than the 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. They also made no changes to their revenue estimates, implying the business is not expected to experience any major impacts to the current trajectory in the near term, even though it is expected to trail the wider industry. The consensus price target held steady at kr236, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Swedbank. Long-term earnings power is much more important than next year's profits. We have forecasts for Swedbank 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 Swedbank (including 1 which doesn't sit too well with us) .

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com