Absolent Air Care Group AB (publ) Just Missed EPS By 8.0%: Here's What Analysts Think Will Happen Next

Absolent Air Care Group AB (publ) (STO:ABSO) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasts think of the company following this report. Revenues of kr1.3b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at kr13.40, missing estimates by 8.0%. The analyst 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. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.

View our latest analysis for Absolent Air Care Group

After the latest results, the single analyst covering Absolent Air Care Group are now predicting revenues of kr1.44b in 2023. If met, this would reflect a reasonable 7.4% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to ascend 11% to kr14.85. Before this earnings report, the analyst had been forecasting revenues of kr1.40b and earnings per share (EPS) of kr14.54 in 2023. It looks like there's been a modest increase in sentiment following the latest results, withthe analyst becoming a bit more optimistic in their predictions for both revenues and earnings.

With these upgrades, we're not surprised to see that the analyst has lifted their price target 6.0% to kr509per share.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Absolent Air Care Group's revenue growth is expected to slow, with the forecast 7.4% annualised growth rate until the end of 2023 being well below the historical 16% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.4% annually. So it's pretty clear that, while Absolent Air Care Group's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Absolent Air Care Group'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 analyst 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. We have analyst estimates for Absolent Air Care Group going out as far as 2025, and you can see them free on our platform here.

You can also view our analysis of Absolent Air Care Group's balance sheet, and whether we think Absolent Air Care Group is carrying too much debt, for free on our platform here.

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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.