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The Atlas Copco AB (publ) (STO:ATCO A) Third-Quarter Results Are Out And Analysts Have Published New Forecasts
It's been a sad week for Atlas Copco AB (publ) (STO:ATCO A), who've watched their investment drop 13% to kr176 in the week since the company reported its quarterly result. It looks like the results were a bit of a negative overall. While revenues of kr48b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.1% to hit kr1.58 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for Atlas Copco from 19 analysts is for revenues of kr215.5b in 2027. If met, it would imply a substantial 22% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 33% to kr7.53. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr212.4b and earnings per share (EPS) of kr7.44 in 2027. 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.
Check out our latest analysis for Atlas Copco
It will come as no surprise then, to learn that the consensus price target is largely unchanged at kr227. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Atlas Copco at kr260 per share, while the most bearish prices it at kr165. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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. The analysts are definitely expecting Atlas Copco's growth to accelerate, with the forecast 17% annualised growth to the end of 2027 ranking favourably alongside historical growth of 8.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.2% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Atlas Copco to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. 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 Atlas Copco. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Atlas Copco analysts - going out to 2028, and you can see them free on our platform here.
It might also be worth considering whether Atlas Copco's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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