Tele2 AB (publ) Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

It's been a good week for Tele2 AB (publ) (STO:TEL2 B) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.2% to kr107. The result was positive overall - although revenues of kr7.3b were in line with what the analysts predicted, Tele2 surprised by delivering a statutory profit of kr1.38 per share, modestly greater than expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Tele2

Following last week's earnings report, Tele2's 18 analysts are forecasting 2024 revenues to be kr29.7b, approximately in line with the last 12 months. Statutory earnings per share are predicted to rise 3.9% to kr5.63. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr29.8b and earnings per share (EPS) of kr5.40 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of kr107, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. Currently, the most bullish analyst values Tele2 at kr124 per share, while the most bearish prices it at kr90.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 2.7% growth on an annualised basis. That is in line with its 2.3% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 3.6% annually. So although Tele2 is expected to maintain its revenue growth rate, it's forecast to grow slower 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 Tele2 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 Tele2's revenue is expected to perform worse than the wider industry. The consensus price target held steady at kr107, with the latest estimates not enough to have an impact on their price targets.

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 Tele2 going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Tele2 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.

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