Electrolux Professional AB (publ) Just Missed EPS By 8.0%: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Electrolux Professional AB (publ) (STO:EPRO B) released its quarterly result to the market. The early response was not positive, with shares down 2.7% to kr43.88 in the past week. It was a pretty mixed result, with revenues beating expectations to hit kr2.8b. Statutory earnings fell 8.0% short of analyst forecasts, reaching kr0.68 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Electrolux Professional

Taking into account the latest results, the most recent consensus for Electrolux Professional from four analysts is for revenues of kr10.8b in 2023 which, if met, would be a credible 5.1% increase on its sales over the past 12 months. Per-share earnings are expected to jump 32% to kr2.80. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr10.9b and earnings per share (EPS) of kr3.03 in 2023. 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 minor downgrade to their earnings per share forecasts.

The average price target fell 14% to kr55.25, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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. Currently, the most bullish analyst values Electrolux Professional at kr60.00 per share, while the most bearish prices it at kr47.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Electrolux Professional's past performance and to peers in the same industry. It's clear from the latest estimates that Electrolux Professional's rate of growth is expected to accelerate meaningfully, with the forecast 4.1% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 1.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Electrolux Professional is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Electrolux Professional. 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 fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Electrolux Professional's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Electrolux Professional. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Electrolux Professional going out to 2024, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for Electrolux Professional that you need to be mindful 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.