kr18.00: That's What Analysts Think Kjell Group AB (publ) (STO:KJELL) Is Worth After Its Latest Results

Kjell Group AB (publ) (STO:KJELL) came out with its second-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was a pretty bad result overall; while revenues were in line with expectations at kr594m, statutory losses exploded to kr0.59 per share. 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. 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 Kjell Group

Taking into account the latest results, Kjell Group's dual analysts currently expect revenues in 2024 to be kr2.64b, approximately in line with the last 12 months. Kjell Group is also expected to turn profitable, with statutory earnings of kr0.51 per share. In the lead-up to this report, the analysts had been modelling revenues of kr2.64b and earnings per share (EPS) of kr0.74 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

The average price target fell 22% to kr18.00, with reduced earnings forecasts clearly tied to a lower valuation estimate.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Kjell Group's revenue growth is expected to slow, with the forecast 3.1% annualised growth rate until the end of 2024 being well below the historical 4.1% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.9% per year. Factoring in the forecast slowdown in growth, it seems obvious that Kjell Group is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Kjell Group. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Kjell Group's revenue is expected to 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 Kjell Group's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Kjell Group. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

It is also worth noting that we have found 1 warning sign for Kjell Group that you need to take into consideration.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com