Earnings Beat: Holmen AB (publ) Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Holmen AB (publ) (STO:HOLM B) just released its latest first-quarter results and things are looking bullish. Holmen beat earnings, with revenues hitting kr5.7b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 13%. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Holmen

Taking into account the latest results, Holmen's six analysts currently expect revenues in 2024 to be kr23.3b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be kr19.23, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of kr22.1b and earnings per share (EPS) of kr18.21 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Despite these upgrades,the analysts have not made any major changes to their price target of kr433, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Holmen, with the most bullish analyst valuing it at kr450 and the most bearish at kr393 per share. This is a very narrow spread of estimates, implying either that Holmen is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Holmen's revenue growth is expected to slow, with the forecast 1.1% annualised growth rate until the end of 2024 being well below the historical 9.7% 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 4.3% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Holmen.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Holmen's earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it 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.

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 Holmen going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 2 warning signs for Holmen 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.