It's been a good week for Kemira Oyj (HEL:KEMIRA) shareholders, because the company has just released its latest yearly results, and the shares gained 2.2% to €13.31. Statutory earnings per share fell badly short of expectations, coming in at €0.72, some 20% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at €2.7b. 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've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Following last week's earnings report, Kemira Oyj's five analysts are forecasting 2020 revenues to be €2.71b, approximately in line with the last 12 months. Statutory earnings per share are expected to soar 29% to €0.93. Yet prior to the latest earnings, analysts had been forecasting revenues of €2.70b and earnings per share (EPS) of €0.93 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of €13.70, suggesting that the company has met expectations in its recent result. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. The most optimistic Kemira Oyj analyst has a price target of €15.50 per share, while the most pessimistic values it at €12.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. It's pretty clear that analysts expect Kemira Oyj's revenue growth will slow down substantially, with revenues next year expected to grow 1.8%, compared to a historical growth rate of 3.9% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 3.1% per year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Kemira Oyj to grow slower 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. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Kemira Oyj's revenues are expected to perform worse than the wider market. The consensus price target held steady at €13.70, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Kemira Oyj analysts - going out to 2023, and you can see them free on our platform here.
You can also see whether Kemira Oyj 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.
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. Thank you for reading.