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Earnings Miss: Fjordkraft Holding ASA Missed EPS By 25% And Analysts Are Revising Their Forecasts

Simply Wall St

Last week, you might have seen that Fjordkraft Holding ASA (OB:FKRAFT) released its quarterly result to the market. The early response was not positive, with shares down 2.1% to kr48.00 in the past week. Sales of kr1.1b surpassed estimates by 3.0%, although earnings per share missed badly, coming in 25% below expectations at kr0.32 per share. Following the result, 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. So we gathered the latest post-earnings forecasts to see what analysts are forecasting for next year.

View our latest analysis for Fjordkraft Holding

OB:FKRAFT Past and Future Earnings, November 16th 2019

Taking into account the latest results, the latest consensus from Fjordkraft Holding's lone analyst is for revenues of kr7.69b in 2020, which would reflect a modest 6.0% improvement in sales compared to the last 12 months. Earnings per share are expected to step up 15% to kr3.47. In the lead-up to this report, analysts had been modelling revenues of kr7.64b and earnings per share (EPS) of kr3.41 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.

With analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 12% to kr55.00. It looks as though analysts previously had some doubts over whether the business would live up to their expectations.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Fjordkraft Holding's revenue growth is expected to slow, with forecast 6.0% increase next year well below the historical 25%p.a. growth over the last three years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.5% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkFjordkraft Holding will grow faster than 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. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.

You can also see our analysis of Fjordkraft Holding's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.