Analysts Are Updating Their HEXPOL AB (publ) (STO:HPOL B) Estimates After Its First-Quarter Results

Last week, you might have seen that HEXPOL AB (publ) (STO:HPOL B) released its quarterly result to the market. The early response was not positive, with shares down 3.8% to kr126 in the past week. Revenues came in 2.1% below expectations, at kr5.3b. Statutory earnings per share were relatively better off, with a per-share profit of kr1.90 being roughly in line with analyst estimates. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on HEXPOL after the latest results.

Check out our latest analysis for HEXPOL

Following last week's earnings report, HEXPOL's six analysts are forecasting 2024 revenues to be kr21.7b, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 7.0% to kr7.80. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr21.7b and earnings per share (EPS) of kr7.68 in 2024. 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.

The analysts reconfirmed their price target of kr137, showing that the business is executing well and in line with expectations. 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 HEXPOL, with the most bullish analyst valuing it at kr150 and the most bearish at kr108 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 HEXPOL's revenue growth is expected to slow, with the forecast 2.2% annualised growth rate until the end of 2024 being well below the historical 11% 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 7.5% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than HEXPOL.

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 kr137, 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. We have estimates - from multiple HEXPOL analysts - going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether HEXPOL's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.