Bravida Holding AB (publ) Just Missed Earnings - But Analysts Have Updated Their Models

It's been a good week for Bravida Holding AB (publ) (STO:BRAV) shareholders, because the company has just released its latest second-quarter results, and the shares gained 6.4% to kr89.50. It was a pretty mixed result, with revenues beating expectations to hit kr7.7b. Statutory earnings fell 6.6% short of analyst forecasts, reaching kr1.16 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Bravida Holding

Taking into account the latest results, Bravida Holding's four analysts currently expect revenues in 2024 to be kr29.8b, approximately in line with the last 12 months. Statutory earnings per share are predicted to rise 9.0% to kr5.86. In the lead-up to this report, the analysts had been modelling revenues of kr29.5b and earnings per share (EPS) of kr5.73 in 2024. So the consensus seems to have become somewhat more optimistic on Bravida Holding's earnings potential following these results.

The consensus price target rose 5.5% to kr95.67, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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. Currently, the most bullish analyst values Bravida Holding at kr112 per share, while the most bearish prices it at kr80.00. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Bravida Holding's revenue growth is expected to slow, with the forecast 0.9% annualised growth rate until the end of 2024 being well below the historical 9.3% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.5% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Bravida Holding.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Bravida Holding's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Bravida Holding going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Bravida Holding , and understanding it should be part of your investment process.

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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