AB Electrolux (publ) (STO:ELUX B) Just Released Its Second-Quarter Earnings: Here's What Analysts Think

AB Electrolux (publ) (STO:ELUX B) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Revenues and losses per share were both better than expected, with revenues of kr34b leading estimates by 5.6%. Statutory losses were smaller than the analystsexpected, coming in at kr0.30 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on AB Electrolux after the latest results.

View our latest analysis for AB Electrolux

Taking into account the latest results, AB Electrolux's ten analysts currently expect revenues in 2024 to be kr132.9b, approximately in line with the last 12 months. AB Electrolux is also expected to turn profitable, with statutory earnings of kr0.62 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of kr132.2b and losses of kr0.22 per share in 2024. Although we saw no serious change to the revenue outlook, the analysts have definitely increased their earnings estimates, estimating a profit next year, compared to previous forecasts of a loss. So it seems like the consensus has become substantially more bullish on AB Electrolux.

There's been no major changes to the consensus price target of kr113, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 AB Electrolux at kr140 per share, while the most bearish prices it at kr83.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 1.6% annualised decline to the end of 2024. That is a notable change from historical growth of 4.3% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - AB Electrolux is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts now expect AB Electrolux to become profitable next year, compared to previous expectations that it would report a loss. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at kr113, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for AB Electrolux going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for AB Electrolux you should know about.

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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