Analysts Have Made A Financial Statement On Arjo AB (publ)'s (STO:ARJO B) Yearly Report

It's been a sad week for Arjo AB (publ) (STO:ARJO B), who've watched their investment drop 12% to kr32.48 in the week since the company reported its yearly result. It was a credible result overall, with revenues of kr11b and statutory earnings per share of kr1.83 both in line with analyst estimates, showing that Arjo is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the consensus forecast from Arjo's five analysts is for revenues of kr11.6b in 2025. This reflects a reasonable 3.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 29% to kr2.36. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr11.8b and earnings per share (EPS) of kr2.49 in 2025. 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 the analysts did make a minor downgrade to their earnings per share forecasts.

See our latest analysis for Arjo

The consensus price target held steady at kr41.40, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Arjo, with the most bullish analyst valuing it at kr46.00 and the most bearish at kr37.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. We would highlight that Arjo's revenue growth is expected to slow, with the forecast 3.0% annualised growth rate until the end of 2025 being well below the historical 5.5% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% per year. Factoring in the forecast slowdown in growth, it seems obvious that Arjo 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Arjo going out to 2027, 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 Arjo 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.