Hexagon AB (publ) (STO:HEXA B) Just Released Its Annual Earnings: Here's What Analysts Think

Hexagon AB (publ) (STO:HEXA B) came out with its annual 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 credible result overall, with revenues of €5.4b and statutory earnings per share of €0.32 both in line with analyst estimates, showing that Hexagon is executing in line with expectations. 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 Hexagon after the latest results.

See our latest analysis for Hexagon

Following the latest results, Hexagon's 16 analysts are now forecasting revenues of €5.75b in 2024. This would be a modest 5.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 32% to €0.42. In the lead-up to this report, the analysts had been modelling revenues of €5.75b and earnings per share (EPS) of €0.42 in 2024. 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.

There were no changes to revenue or earnings estimates or the price target of kr123, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Hexagon analyst has a price target of kr166 per share, while the most pessimistic values it at kr82.17. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Hexagon's revenue growth is expected to slow, with the forecast 5.7% annualised growth rate until the end of 2024 being well below the historical 8.6% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.7% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Hexagon.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share 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.

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 forecasts for Hexagon going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Hexagon 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.