Earnings Miss: HEXPOL AB (publ) Missed EPS By 9.8% And Analysts Are Revising Their Forecasts

It's been a good week for HEXPOL AB (publ) (STO:HPOL B) shareholders, because the company has just released its latest third-quarter results, and the shares gained 3.4% to kr107. It looks like the results were a bit of a negative overall. While revenues of kr5.0b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 9.8% to hit kr1.62 per share. 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. 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.

See our latest analysis for HEXPOL

After the latest results, the six analysts covering HEXPOL are now predicting revenues of kr21.1b in 2025. If met, this would reflect an okay 2.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 11% to kr7.65. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr21.4b and earnings per share (EPS) of kr7.79 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With no major changes to earnings forecasts, the consensus price target fell 5.2% to kr128, suggesting that the analysts might have previously been hoping for an earnings upgrade. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic HEXPOL analyst has a price target of kr145 per share, while the most pessimistic values it at kr114. This is a very narrow spread of estimates, implying either that HEXPOL is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that HEXPOL's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.8% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.0% 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 HEXPOL.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that HEXPOL's revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 HEXPOL 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.