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

Shareholders might have noticed that Sweco AB (publ) (STO:SWEC B) filed its quarterly result this time last week. The early response was not positive, with shares down 4.1% to kr169 in the past week. It looks like the results were a bit of a negative overall. While revenues of kr8.1b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.3% to hit kr1.78 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Our free stock report includes 2 warning signs investors should be aware of before investing in Sweco. Read for free now.

After the latest results, the six analysts covering Sweco are now predicting revenues of kr32.0b in 2025. If met, this would reflect a modest 3.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 12% to kr6.71. In the lead-up to this report, the analysts had been modelling revenues of kr32.2b and earnings per share (EPS) of kr6.77 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for Sweco

With no major changes to earnings forecasts, the consensus price target fell 5.6% to kr186, suggesting that the analysts might have previously been hoping for an earnings upgrade. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Sweco at kr195 per share, while the most bearish prices it at kr180. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Sweco is an easy business to forecast or the the analysts are all using similar assumptions.

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. It's pretty clear that there is an expectation that Sweco's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.4% growth on an annualised basis. This is compared to a historical growth rate of 9.5% over the past five years. Compare this to the 17 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.0% per year. Factoring in the forecast slowdown in growth, it looks like Sweco is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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 in mind, we wouldn't be too quick to come to a conclusion on Sweco. Long-term earnings power is much more important than next year's profits. We have forecasts for Sweco going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Sweco 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.