Here's What Analysts Are Forecasting For Atlas Copco AB (STO:ATCO A) After Its Second-Quarter Results

Atlas Copco AB (STO:ATCO A) shareholders are probably feeling a little disappointed, since its shares fell 9.0% to kr183 in the week after its latest quarterly results. Results were roughly in line with estimates, with revenues of kr45b and statutory earnings per share of kr1.57. 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. 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 Atlas Copco

Taking into account the latest results, Atlas Copco's 19 analysts currently expect revenues in 2024 to be kr178.7b, approximately in line with the last 12 months. Per-share earnings are expected to rise 2.6% to kr6.18. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr179.4b and earnings per share (EPS) of kr6.15 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 kr192. 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 kr238 and the most bearish at kr122 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We would highlight that Atlas Copco's revenue growth is expected to slow, with the forecast 1.8% annualised growth rate until the end of 2024 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 4.5% 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 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. 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 kr192, 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 Atlas Copco analysts - going out to 2026, and you can see them free on our platform here.

You can also see whether Atlas Copco is carrying too much debt, and whether its balance sheet is healthy, 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.

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