Sandvik AB (publ) Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

The analysts might have been a bit too bullish on Sandvik AB (publ) (STO:SAND), given that the company fell short of expectations when it released its third-quarter results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at kr30b, statutory earnings missed forecasts by 14%, coming in at just kr2.58 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sandvik after the latest results.

See our latest analysis for Sandvik

Taking into account the latest results, the most recent consensus for Sandvik from 19 analysts is for revenues of kr129.1b in 2025. If met, it would imply a satisfactory 5.3% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 38% to kr13.44. In the lead-up to this report, the analysts had been modelling revenues of kr130.0b and earnings per share (EPS) of kr13.86 in 2025. 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.

It might be a surprise to learn that the consensus price target was broadly unchanged at kr234, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Sandvik, with the most bullish analyst valuing it at kr290 and the most bearish at kr175 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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 Sandvik's revenue growth is expected to slow, with the forecast 4.3% annualised growth rate until the end of 2025 being well below the historical 7.4% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.3% annually. So it's pretty clear that, while Sandvik's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sandvik. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at kr234, 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 Sandvik analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Sandvik has 2 warning signs we think you should be aware 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.