Earnings Report: Alfa Laval Corporate AB Missed Revenue Estimates By 6.5%

It's been a pretty great week for Alfa Laval Corporate AB (STO:ALFA) shareholders, with its shares surging 13% to kr473 in the week since its latest quarterly results. Revenues came in 6.5% below expectations, at kr15b. Statutory earnings per share were relatively better off, with a per-share profit of kr4.07 being roughly in line with analyst estimates. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Alfa Laval

Taking into account the latest results, the consensus forecast from Alfa Laval's 17 analysts is for revenues of kr69.3b in 2024. This reflects a modest 7.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to grow 17% to kr18.40. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr68.8b and earnings per share (EPS) of kr18.21 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at kr406. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Alfa Laval at kr540 per share, while the most bearish prices it at kr297. 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. It's clear from the latest estimates that Alfa Laval's rate of growth is expected to accelerate meaningfully, with the forecast 10% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Alfa Laval is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at kr406, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Alfa Laval analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Alfa Laval that you should be aware of.

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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.