Last week, you might have seen that ASSA ABLOY AB (publ) (STO:ASSA B) released its annual result to the market. The early response was not positive, with shares down 8.2% to kr178 in the past week. ASSA ABLOY reported in line with analyst predictions, delivering revenues of kr94b and statutory earnings per share of kr9.00, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on ASSA ABLOY after the latest results.
Taking into account the latest results, the current consensus from ASSA ABLOY's 20 analysts is for revenues of kr99.9b in 2020, which would reflect a credible 6.2% increase on its sales over the past 12 months. Statutory earnings per share are expected to expand 17% to kr10.50. In the lead-up to this report, analysts had been modelling revenues of kr100.6b and earnings per share (EPS) of kr10.67 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
Analysts reconfirmed their price target of kr215, showing that the business is executing well and in line with expectations. 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 ASSA ABLOY analyst has a price target of kr260 per share, while the most pessimistic values it at kr152. This shows there is still quite 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.
It can also be useful to step back and take a broader view of how analyst forecasts compare to ASSA ABLOY's performance in recent years. We would highlight that ASSA ABLOY's revenue growth is expected to slow, with forecast 6.2% increase next year well below the historical 8.6%p.a. growth over the last five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.3% next year. Factoring in the forecast slowdown in growth, it looks like analysts are expecting ASSA ABLOY to grow at about the same rate as the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. 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 ASSA ABLOY. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for ASSA ABLOY going out to 2023, and you can see them free on our platform here..
You can also see whether ASSA ABLOY is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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