Analysts Have Made A Financial Statement On Billerud AB (publ)'s (STO:BILL) First-Quarter Report

Billerud AB (publ) (STO:BILL) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. The company beat expectations with revenues of kr10b arriving 4.3% ahead of forecasts. Statutory earnings per share (EPS) were kr1.26, 4.7% ahead of estimates. 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.

Check out our latest analysis for Billerud

Following the latest results, Billerud's seven analysts are now forecasting revenues of kr43.6b in 2024. This would be a solid 8.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 824% to kr5.88. Before this earnings report, the analysts had been forecasting revenues of kr41.6b and earnings per share (EPS) of kr5.23 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice increase in earnings per share in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of kr104, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Billerud at kr130 per share, while the most bearish prices it at kr86.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. We would highlight that Billerud's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.4% per year. So it's pretty clear that, while Billerud's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Billerud's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster 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 in mind, we wouldn't be too quick to come to a conclusion on Billerud. Long-term earnings power is much more important than next year's profits. We have forecasts for Billerud going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Billerud you should be aware of.

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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.