Hufvudstaden AB (publ) Just Missed EPS By 82%: Here's What Analysts Think Will Happen Next

Investors in Hufvudstaden AB (publ) (STO:HUFV A) had a good week, as its shares rose 5.8% to close at kr137 following the release of its second-quarter results. It looks like a pretty bad result, all things considered. Although revenues of kr782m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 82% to hit kr0.21 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Hufvudstaden

Following last week's earnings report, Hufvudstaden's four analysts are forecasting 2024 revenues to be kr3.11b, approximately in line with the last 12 months. Per-share statutory losses are expected to explode, reaching kr0.09 per share. Before this earnings report, the analysts had been forecasting revenues of kr3.11b and earnings per share (EPS) of kr1.46 in 2024. So despite reconfirming their revenue estimates, the analysts are now forecasting a loss instead of a profit, which looks like a definite drop in sentiment following the latest results.

As a result, there was no major change to the consensus price target of kr133, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Hufvudstaden, with the most bullish analyst valuing it at kr150 and the most bearish at kr110 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Hufvudstaden shareholders.

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 3.7% by the end of 2024. This indicates a significant reduction from annual growth of 12% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.2% annually for the foreseeable future. It's pretty clear that Hufvudstaden's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts are expecting Hufvudstaden to become unprofitable next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Hufvudstaden's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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. We have estimates - from multiple Hufvudstaden analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Hufvudstaden that we have uncovered.

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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.