Evolution AB (publ) (STO:EVO) Just Released Its Annual Earnings: Here's What Analysts Think

Last week, you might have seen that Evolution AB (publ) (STO:EVO) released its annual result to the market. The early response was not positive, with shares down 3.3% to kr560 in the past week. Evolution reported €2.1b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of €5.23 beat expectations, being 3.9% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the current consensus from Evolution's 14 analysts is for revenues of €2.16b in 2026. This would reflect an okay 4.4% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be €5.31, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of €2.19b and earnings per share (EPS) of €5.43 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

Check out our latest analysis for Evolution

It might be a surprise to learn that the consensus price target was broadly unchanged at kr671, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Evolution at kr1,051 per share, while the most bearish prices it at kr480. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Evolution's revenue growth is expected to slow, with the forecast 4.4% annualised growth rate until the end of 2026 being well below the historical 21% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.1% annually. Factoring in the forecast slowdown in growth, it seems obvious that Evolution is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Evolution's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 Simply Wall St, we have a full range of analyst estimates for Evolution going out to 2028, and you can see them free on our platform here..

You can also see our analysis of Evolution's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.