Stock Analysis

Earnings Miss: Nordic Paper Holding AB (publ) Missed EPS By 8.7% And Analysts Are Revising Their Forecasts

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Nordic Paper Holding AB (publ) (STO:NPAPER) missed earnings with its latest annual results, disappointing overly-optimistic forecasters. Results look to have been somewhat negative - revenue fell 3.3% short of analyst estimates at kr4.5b, and statutory earnings of kr6.22 per share missed forecasts by 8.7%. 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'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 Nordic Paper Holding

OM:NPAPER Earnings and Revenue Growth February 2nd 2024

Following the latest results, Nordic Paper Holding's twin analysts are now forecasting revenues of kr4.58b in 2024. This would be an okay 2.4% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be kr6.16, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of kr4.52b and earnings per share (EPS) of kr6.15 in 2024. 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 the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 9.1% to kr60.00. It looks as though they previously had some doubts over whether the business would live up to their expectations.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Nordic Paper Holding's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.4% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 1.7% per year. Even after the forecast slowdown in growth, it seems obvious that Nordic Paper Holding is also expected to grow faster than the wider industry.

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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Nordic Paper Holding you should be aware of.

Valuation is complex, but we're helping make it simple.

Find out whether Nordic Paper Holding is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.