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Shareholders might have noticed that Austevoll Seafood ASA (OB:AUSS) filed its quarterly result this time last week. The early response was not positive, with shares down 6.3% to kr77.05 in the past week. Revenues fell 4.8% short of expectations, at kr5.9b. Earnings correspondingly dipped, with Austevoll Seafood reporting a statutory loss of kr0.18 per share, whereas the analysts had previously modelled a profit in this period. 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, Austevoll Seafood's five analysts currently expect revenues in 2020 to be kr23.6b, approximately in line with the last 12 months. Statutory earnings per share are forecast to decrease 7.9% to kr3.91 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr24.4b and earnings per share (EPS) of kr7.25 in 2020. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a large cut to earnings per share numbers.
The analysts made no major changes to their price target of kr119, suggesting the downgrades are not expected to have a long-term impact on Austevoll Seafood'svaluation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Austevoll Seafood at kr140 per share, while the most bearish prices it at kr105. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Austevoll Seafood is an easy business to forecast or the the analysts are all using similar assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Austevoll Seafood's revenue growth is expected to slow, with forecast 0.07% increase next year well below the historical 10%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 7.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Austevoll Seafood is also expected to grow slower than other industry participants.
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. 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 Austevoll Seafood. 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 Austevoll Seafood going out to 2022, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for Austevoll Seafood that we have uncovered.
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