Rejlers AB (publ) (STO:REJL B) Just Reported Earnings, And Analysts Cut Their Target Price

It's been a good week for Rejlers AB (publ) (STO:REJL B) shareholders, because the company has just released its latest quarterly results, and the shares gained 9.0% to kr167. Results overall were respectable, with statutory earnings of kr8.32 per share roughly in line with what the analysts had forecast. Revenues of kr1.1b came in 3.0% ahead of analyst predictions. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Rejlers

Following the latest results, Rejlers' dual analysts are now forecasting revenues of kr4.41b in 2024. This would be a reasonable 3.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 6.4% to kr9.66. In the lead-up to this report, the analysts had been modelling revenues of kr4.36b and earnings per share (EPS) of kr9.86 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.

The consensus price target fell 8.5% to kr179, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the quarterly results.

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. It's pretty clear that there is an expectation that Rejlers' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.3% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.7% annually. So it's pretty clear that, while Rejlers' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share 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.

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 least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Before you take the next step you should know about the 2 warning signs for Rejlers that we have uncovered.

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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.

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