Wallenstam AB (publ) Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Wallenstam AB (publ) (STO:WALL B) filed its first-quarter result this time last week. The early response was not positive, with shares down 4.1% to kr38.94 in the past week. Although revenues of kr660m were in line with analyst expectations, Wallenstam surprised on the earnings front, with an unexpected (statutory) profit of kr0.10 per share a nice improvement on the losses that the analystsforecast. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Wallenstam

Following the latest results, Wallenstam's dual analysts are now forecasting revenues of kr2.68b in 2023. This would be a satisfactory 2.7% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Wallenstam forecast to report a statutory profit of kr1.08 per share. Before this earnings report, the analysts had been forecasting revenues of kr2.69b and earnings per share (EPS) of kr1.32 in 2023. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

The average price target fell 9.9% to kr36.25, with reduced earnings forecasts clearly tied to a lower valuation estimate.

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 can infer from the latest estimates that forecasts expect a continuation of Wallenstam'shistorical trends, as the 3.7% annualised revenue growth to the end of 2023 is roughly in line with the 3.7% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.8% per year. So although Wallenstam is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues 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 Wallenstam's future valuation.

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 analyst estimates for Wallenstam going out as far as 2025, and you can see them free on our platform here.

Even so, be aware that Wallenstam is showing 1 warning sign in our investment analysis , you should know about...

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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.