Thule Group AB (publ) (STO:THULE) 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. Results were roughly in line with estimates, with revenues of kr7.0b and statutory earnings per share of kr8.55. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus, from the four analysts covering Thule Group, is for revenues of kr6.87b in 2020, which would reflect a noticeable 2.4% reduction in Thule Group's sales over the past 12 months. Statutory earnings per share are forecast to decrease 6.7% to kr7.98 in the same period. Before this earnings report, the analysts had been forecasting revenues of kr7.27b and earnings per share (EPS) of kr9.20 in 2020. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a real cut to earnings per share numbers.
The analysts made no major changes to their price target of kr202, suggesting the downgrades are not expected to have a long-term impact on Thule Group'svaluation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Thule Group analyst has a price target of kr225 per share, while the most pessimistic values it at kr180. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Thule Group's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with the forecast 2.4% revenue decline a notable change from historical growth of 7.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.3% next year. It's pretty clear that Thule Group's revenues are expected to perform substantially worse than the wider industry.
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. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at kr202, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Thule Group going out to 2022, and you can see them free on our platform here.
You still need to take note of risks, for example - Thule Group has 2 warning signs we think you should be aware of.
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