Here's What Analysts Are Forecasting For Hexagon AB (publ) (STO:HEXA B) After Its Second-Quarter Results

Investors in Hexagon AB (publ) (STO:HEXA B) had a good week, as its shares rose 9.6% to close at kr113 following the release of its second-quarter results. Hexagon beat revenue expectations by 2.5%, at €1.4b. Statutory earnings per share (EPS) came in at €0.083, some 4.4% short of analyst estimates. 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.

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Taking into account the latest results, Hexagon's 15 analysts currently expect revenues in 2025 to be €5.47b, approximately in line with the last 12 months. Statutory earnings per share are predicted to rise 2.7% to €0.36. Before this earnings report, the analysts had been forecasting revenues of €5.46b and earnings per share (EPS) of €0.36 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

Check out our latest analysis for Hexagon

It will come as no surprise then, to learn that the consensus price target is largely unchanged at kr112. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Hexagon analyst has a price target of kr145 per share, while the most pessimistic values it at kr87.64. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Hexagon's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.1% growth on an annualised basis. This is compared to a historical growth rate of 8.5% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that Hexagon is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Hexagon. Long-term earnings power is much more important than next year's profits. We have forecasts for Hexagon going out to 2027, and you can see them free on our platform here.

You can also view our analysis of Hexagon's balance sheet, and whether we think Hexagon is carrying too much debt, for free on our platform here.

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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.