Earnings Update: AB Electrolux (publ) (STO:ELUX B) Just Reported Its Full-Year Results And Analysts Are Updating Their Forecasts

AB Electrolux (publ) (STO:ELUX B) shareholders are probably feeling a little disappointed, since its shares fell 2.8% to kr98.16 in the week after its latest annual results. Revenues were in line with expectations, at kr134b, while statutory losses ballooned to kr19.36 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for AB Electrolux

Following the recent earnings report, the consensus from ten analysts covering AB Electrolux is for revenues of kr131.5b in 2024. This implies a perceptible 2.2% decline in revenue compared to the last 12 months. Earnings are expected to improve, with AB Electrolux forecast to report a statutory profit of kr5.39 per share. In the lead-up to this report, the analysts had been modelling revenues of kr134.4b and earnings per share (EPS) of kr7.20 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The analysts made no major changes to their price target of kr126, suggesting the downgrades are not expected to have a long-term impact on AB Electrolux's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on AB Electrolux, with the most bullish analyst valuing it at kr180 and the most bearish at kr85.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.2% by the end of 2024. This indicates a significant reduction from annual growth of 4.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 1.4% annually for the foreseeable future. So it's pretty clear that AB Electrolux's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for AB Electrolux. Unfortunately they also cut their revenue estimates for next year. Forecasts imply the business' revenue is expected to perform worse than the wider industry. That said, earnings per share are more important for creating value for shareholders. The consensus price target held steady at kr126, with the latest estimates not enough to have an impact on their price targets.

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. 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.