Investors in Olvi Oyj (HEL:OLVAS) had a good week, as its shares rose 5.2% to close at €38.50 following the release of its first-quarter results. It was a pretty mixed result, with revenues beating expectations to hit €85m. Statutory earnings fell 7.1% short of analyst forecasts, reaching €0.26 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, Olvi Oyj's dual analysts currently expect revenues in 2020 to be €410.0m, approximately in line with the last 12 months. Statutory per share are forecast to be €2.01, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of €405.9m and earnings per share (EPS) of €2.11 in 2020. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 10% to €44.00, suggesting the revised estimates are not indicative of a weaker long-term future for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with the forecast 1.5% revenue decline a notable change from historical growth of 6.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Olvi Oyj is expected to lag 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.
We also provide an overview of the Olvi Oyj Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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