Coor Service Management Holding AB (STO:COOR) shares fell 7.5% to kr76.80 in the week since its latest quarterly results. Revenues of kr2.5b were in line with forecasts, although earnings per share (EPS) came in below expectations at kr0.42, missing estimates by 8.3%. This is an important time for investors, as they can track a company’s performance in its report, look at what top analysts are forecasting for next year, and see whether the latest forecasts would suggest a change of heart on the company. With this in mind, we’ve gathered the latest forecasts to see what analysts are expecting for next year.
Taking into account the latest results, the current consensus from Coor Service Management Holding’s four analysts is for revenues of kr11b in 2020, which would reflect a credible 7.2% increase on its sales over the past 12 months. Earnings per share are expected to soar 62% to kr2.83. In the lead-up to this report, analysts had been modelling revenues of kr11b and earnings per share (EPS) of kr2.94 in 2020. 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 analysts did make a small dip in their earnings per share forecasts.
The consensus price target held steady at kr88.45, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Coor Service Management Holding at kr96.00 per share, while the most bearish prices it at kr79.00. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or that analysts have a clear view on its prospects.
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 analysts are more or less bullish relative to other companies in the market. We can infer from the latest estimates that analysts are expecting a continuation of Coor Service Management Holding’s historical trends, as next year’s forecast 7.2% revenue growth is roughly in line with 7.9% annual revenue growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the are forecast to see their revenues grow 7.0% per year. So although Coor Service Management Holding is expected to maintain its revenue growth rate, it’s only growing at about the rate of the wider market.
The Bottom Line
The biggest highlight of the new consensus is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Coor Service Management Holding. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. The consensus price target held steady at kr88.45, with the latest estimates not enough to have an impact on analysts’ estimated valuations.
Still, the long-term prospects of the business are much more relevant than next year’s earnings. We have estimates – from multiple Coor Service Management Holding analysts – going out to 2023, and you can see them free on our platform here.
You can also view our analysis of Coor Service Management Holding’s balance sheet, and whether we think Coor Service Management Holding is carrying too much debt, for free on our platform here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.