The Kjell Group AB (publ) (STO:KJELL) First-Quarter Results Are Out And Analysts Have Published New Forecasts

As you might know, Kjell Group AB (publ) (STO:KJELL) recently reported its quarterly numbers. It was a pretty bad result overall; while revenues were in line with expectations at kr591m, statutory losses exploded to kr0.70 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Kjell Group

Following the latest results, Kjell Group's two analysts are now forecasting revenues of kr2.64b in 2024. This would be a modest 2.6% improvement in revenue compared to the last 12 months. Kjell Group is also expected to turn profitable, with statutory earnings of kr1.37 per share. Before this earnings report, the analysts had been forecasting revenues of kr2.63b and earnings per share (EPS) of kr1.70 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at kr27.50, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Kjell Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.5% growth on an annualised basis. This is compared to a historical growth rate of 6.1% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.2% 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 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. 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 held steady at kr27.50, with the latest estimates not enough to have an impact on their price targets.

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.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Kjell Group , and understanding them should be part of your investment process.

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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.