Lifco AB (publ) (STO:LIFCO B) Analysts Are Pretty Bullish On The Stock After Recent Results

Last week, you might have seen that Lifco AB (publ) (STO:LIFCO B) released its quarterly result to the market. The early response was not positive, with shares down 2.7% to kr266 in the past week. Revenues came in 3.3% below expectations, at kr6.0b. Statutory earnings per share were relatively better off, with a per-share profit of kr7.21 being roughly in line with analyst estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Lifco

Following the latest results, Lifco's three analysts are now forecasting revenues of kr25.2b in 2024. This would be a modest 2.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to dip 5.7% to kr6.61 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr25.9b and earnings per share (EPS) of kr7.19 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

What's most unexpected is that the consensus price target rose 5.9% to kr286, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Lifco at kr295 per share, while the most bearish prices it at kr277. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 Lifco's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.8% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that Lifco 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 Lifco. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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

You can also see whether Lifco 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.