kr179 - That's What Analysts Think Afry AB (STO:AFRY) Is Worth After These Results

It's been a pretty great week for Afry AB (STO:AFRY) shareholders, with its shares surging 17% to kr165 in the week since its latest full-year results. It was a credible result overall, with revenues of kr27b and statutory earnings per share of kr9.71 both in line with analyst estimates, showing that Afry is executing in line with expectations. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Afry

After the latest results, the five analysts covering Afry are now predicting revenues of kr27.9b in 2024. If met, this would reflect a reasonable 3.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 18% to kr11.44. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr28.1b and earnings per share (EPS) of kr11.57 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 5.9% to kr179. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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. There are some variant perceptions on Afry, with the most bullish analyst valuing it at kr205 and the most bearish at kr110 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. We would highlight that Afry's revenue growth is expected to slow, with the forecast 3.4% annualised growth rate until the end of 2024 being well below the historical 10.0% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that Afry is also expected to grow slower than other industry participants.

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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Afry's revenue is expected to perform worse 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Afry going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Afry has 1 warning sign 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.