Earnings Release: Here's Why Analysts Cut Their HEXPOL AB (publ) (STO:HPOL B) Price Target To kr103

Last week saw the newest first-quarter earnings release from HEXPOL AB (publ) (STO:HPOL B), an important milestone in the company's journey to build a stronger business. Results were roughly in line with estimates, with revenues of kr5.4b and statutory earnings per share of kr1.75. 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. 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.

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Taking into account the latest results, the five analysts covering HEXPOL provided consensus estimates of kr19.5b revenue in 2025, which would reflect a measurable 4.9% decline over the past 12 months. Per-share earnings are expected to rise 3.1% to kr6.49. Before this earnings report, the analysts had been forecasting revenues of kr20.2b and earnings per share (EPS) of kr6.70 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

View our latest analysis for HEXPOL

The consensus price target fell 5.1% to kr103, with the weaker earnings outlook clearly leading valuation estimates. 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. There are some variant perceptions on HEXPOL, with the most bullish analyst valuing it at kr115 and the most bearish at kr90.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting HEXPOL is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 6.5% by the end of 2025. This indicates a significant reduction from annual growth of 10% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.9% per year. It's pretty clear that HEXPOL's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for HEXPOL. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of HEXPOL's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple HEXPOL analysts - going out to 2027, 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.