Synsam AB (publ) (STO:SYNSAM) First-Quarter Results: Here's What Analysts Are Forecasting For This Year

It's been a good week for Synsam AB (publ) (STO:SYNSAM) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.5% to kr64.50. Results overall were respectable, with statutory earnings of kr0.60 per share roughly in line with what the analysts had forecast. Revenues of kr1.2b came in 3.7% ahead of analyst predictions. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Synsam after the latest results.

See our latest analysis for Synsam

Taking into account the latest results, the most recent consensus for Synsam from four analysts is for revenues of kr5.16b in 2022 which, if met, would be a credible 6.9% increase on its sales over the past 12 months. Per-share earnings are expected to soar 260% to kr3.89. In the lead-up to this report, the analysts had been modelling revenues of kr5.14b and earnings per share (EPS) of kr3.38 in 2022. Although the revenue estimates have not really changed, we can see there's been a solid gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target was unchanged at kr83.25, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Synsam at kr85.00 per share, while the most bearish prices it at kr80.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Synsam's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 9.3% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.0% per year. Even after the forecast slowdown in growth, it seems obvious that Synsam is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Synsam following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 Synsam analysts - going out to 2024, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Synsam (1 is significant!) 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.