It's been a good week for Peab AB (publ) (STO:PEAB B) shareholders, because the company has just released its latest annual results, and the shares gained 6.3% to kr104. Peab reported in line with analyst predictions, delivering revenues of kr54b and statutory earnings per share of kr7.09, 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. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Following the latest results, Peab's three analysts are now forecasting revenues of kr58.8b in 2020. This would be a notable 8.9% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to shoot up 26% to kr8.96. Before this earnings report, analysts had been forecasting revenues of kr59.7b and earnings per share (EPS) of kr7.24 in 2020. Although the revenue estimates have not really changed, we can see there's been a sizeable expansion in earnings per share expectations, suggesting that analysts have become more bullish after the latest result.
The consensus price target rose 6.8% to kr110, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Peab at kr115 per share, while the most bearish prices it at kr105. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Further, we can compare these estimates to past performance, and see how Peab forecasts compare to the wider market's forecast performance. It's clear from the latest estimates that Peab's rate of growth is expected to accelerate meaningfully, with forecast 8.9% revenue growth noticeably faster than its historical growth of 4.9%p.a. over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 3.3% next year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect Peab to grow faster than the wider market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Peab following these results. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Peab's revenues are expected 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.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Peab going out to 2022, and you can see them free on our platform here..
You can also view our analysis of Peab's balance sheet, and whether we think Peab is carrying too much debt, 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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