NCC AB (publ) Just Beat EPS By 11%: Here's What Analysts Think Will Happen Next

NCC AB (publ) (STO:NCC B) investors will be delighted, with the company turning in some strong numbers with its latest results. NCC beat earnings, with revenues hitting kr15b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 11%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for NCC

Taking into account the latest results, NCC's four analysts currently expect revenues in 2024 to be kr57.4b, approximately in line with the last 12 months. Statutory earnings per share are forecast to decrease 3.8% to kr13.70 in the same period. Before this earnings report, the analysts had been forecasting revenues of kr56.2b and earnings per share (EPS) of kr13.22 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 11% to kr166per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on NCC, with the most bullish analyst valuing it at kr175 and the most bearish at kr155 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting NCC is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that NCC's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 2.9% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.4% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.1% per year. Although NCC's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around NCC's earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple NCC analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with NCC .

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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