Analysts Have Been Trimming Their Instalco AB (publ) (STO:INSTAL) Price Target After Its Latest Report

It's been a mediocre week for Instalco AB (publ) (STO:INSTAL) shareholders, with the stock dropping 15% to kr26.88 in the week since its latest quarterly results. It was a workmanlike result, with revenues of kr3.3b coming in 3.6% ahead of expectations, and statutory earnings per share of kr0.16, in line with analyst appraisals. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

We've discovered 3 warning signs about Instalco. View them for free.

Following last week's earnings report, Instalco's five analysts are forecasting 2025 revenues to be kr13.8b, approximately in line with the last 12 months. Per-share earnings are expected to jump 48% to kr1.57. Before this earnings report, the analysts had been forecasting revenues of kr13.7b and earnings per share (EPS) of kr1.83 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

See our latest analysis for Instalco

It might be a surprise to learn that the consensus price target fell 6.6% to kr42.75, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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 Instalco at kr50.00 per share, while the most bearish prices it at kr26.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Instalco's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.2% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.0% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Instalco.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Instalco's revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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

Before you take the next step you should know about the 3 warning signs for Instalco that we have uncovered.

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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.