Earnings Update: HEXPOL AB (publ) (STO:HPOL B) Just Reported Its Annual Results And Analysts Are Updating Their Forecasts

It's been a good week for HEXPOL AB (publ) (STO:HPOL B) shareholders, because the company has just released its latest yearly results, and the shares gained 2.9% to kr119. Revenues of kr22b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at kr7.33, missing estimates by 3.6%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for HEXPOL

Taking into account the latest results, the six analysts covering HEXPOL provided consensus estimates of kr21.6b revenue in 2024, which would reflect a discernible 2.1% decline over the past 12 months. Per-share earnings are expected to rise 4.0% to kr7.62. In the lead-up to this report, the analysts had been modelling revenues of kr21.8b and earnings per share (EPS) of kr7.62 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.

There were no changes to revenue or earnings estimates or the price target of kr132, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic HEXPOL analyst has a price target of kr147 per share, while the most pessimistic values it at kr108. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 2.1% annualised decline to the end of 2024. That is a notable change from historical growth of 12% 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 11% per year. It's pretty clear that HEXPOL's revenues are expected to perform substantially worse than the wider industry.

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. 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. The consensus price target held steady at kr132, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on HEXPOL. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple HEXPOL analysts - going out to 2026, and you can see them free on our platform here.

You can also view our analysis of HEXPOL's balance sheet, and whether we think HEXPOL is carrying too much debt, for free on our 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.