The Arjo AB (publ) (STO:ARJO B) Second-Quarter Results Are Out And Analysts Have Published New Forecasts

It's been a good week for Arjo AB (publ) (STO:ARJO B) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.0% to kr35.78. Results were roughly in line with estimates, with revenues of kr2.7b and statutory earnings per share of kr0.34. 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.

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Following last week's earnings report, Arjo's five analysts are forecasting 2025 revenues to be kr11.2b, approximately in line with the last 12 months. Statutory earnings per share are predicted to climb 17% to kr1.85. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr11.2b and earnings per share (EPS) of kr1.84 in 2025. 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.

Check out our latest analysis for Arjo

It will come as no surprise then, to learn that the consensus price target is largely unchanged at kr37.00. 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 Arjo at kr40.00 per share, while the most bearish prices it at kr32.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Arjo is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Arjo's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 1.8% annualised decline to the end of 2025. That is a notable change from historical growth of 5.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 18% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Arjo is expected to lag the wider 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. 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 kr37.00, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Arjo going out to 2027, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for Arjo that you need to take into consideration.

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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.