Atlas Copco AB (publ) Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's shaping up to be a tough period for Atlas Copco AB (publ) (STO:ATCO A), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. Results look to have been somewhat negative - revenue fell 2.7% short of analyst estimates at kr43b, and statutory earnings of kr1.35 per share missed forecasts by 8.6%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, Atlas Copco's 18 analysts currently expect revenues in 2025 to be kr176.7b, approximately in line with the last 12 months. Statutory earnings per share are expected to shrink 2.4% to kr5.86 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr177.4b and earnings per share (EPS) of kr6.03 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

Check out our latest analysis for Atlas Copco

The consensus price target held steady at kr174, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on Atlas Copco, with the most bullish analyst valuing it at kr210 and the most bearish at kr130 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Atlas Copco's past performance and to peers in the same industry. We would highlight that Atlas Copco's revenue growth is expected to slow, with the forecast 0.03% annualised growth rate until the end of 2025 being well below the historical 14% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.1% per year. Factoring in the forecast slowdown in growth, it seems obvious that Atlas Copco is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Atlas Copco. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Atlas Copco going out to 2027, and you can see them free on our platform here.

You can also view our analysis of Atlas Copco's balance sheet, and whether we think Atlas Copco 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.