Sandvik AB (publ) (STO:SAND) Just Reported, And Analysts Assigned A kr219 Price Target

The first-quarter results for Sandvik AB (publ) (STO:SAND) were released last week, making it a good time to revisit its performance. Revenues came in 3.2% below expectations, at kr29b. Statutory earnings per share were relatively better off, with a per-share profit of kr2.97 being roughly in line with analyst estimates. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

We've discovered 1 warning sign about Sandvik. View them for free.

Following the recent earnings report, the consensus from 19 analysts covering Sandvik is for revenues of kr120.1b in 2025. This implies a measurable 2.5% decline in revenue compared to the last 12 months. Per-share earnings are expected to increase 4.3% to kr12.25. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr126.3b and earnings per share (EPS) of kr13.34 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

View our latest analysis for Sandvik

The consensus price target fell 5.1% to kr219, with the weaker earnings outlook clearly leading valuation estimates. 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. The most optimistic Sandvik analyst has a price target of kr275 per share, while the most pessimistic values it at kr165. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.3% by the end of 2025. This indicates a significant reduction from annual growth of 8.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.0% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Sandvik is expected to lag the wider industry.

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. 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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Sandvik's future valuation.

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 Sandvik analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Sandvik .

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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.