Earnings Release: Here's Why Analysts Cut Their Enad Global 7 AB (publ) (STO:EG7) Price Target To kr41.00

As you might know, Enad Global 7 AB (publ) (STO:EG7) recently reported its quarterly numbers. Revenues were kr353m, with Enad Global 7 reporting some 6.2% below analyst expectations. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.

Check out our latest analysis for Enad Global 7

Taking into account the latest results, the sole analyst covering Enad Global 7 provided consensus estimates of kr1.73b revenue in 2024, which would reflect a noticeable 3.0% decline over the past 12 months. Per-share earnings are expected to leap 68% to kr0.81. Before this earnings report, the analyst had been forecasting revenues of kr1.69b and earnings per share (EPS) of kr1.08 in 2024. While next year's revenue estimates increased, there was also a large cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

The analyst also cut Enad Global 7's price target 6.8% to kr41.00, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in revenue.

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. We would highlight that revenue is expected to reverse, with a forecast 5.9% annualised decline to the end of 2024. That is a notable change from historical growth of 18% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Enad Global 7 is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Enad Global 7. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Enad Global 7 that you should be aware of.

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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.