Gränges AB (publ) Just Recorded A 8.7% Revenue Beat: Here's What Analysts Think

Shareholders might have noticed that Gränges AB (publ) (STO:GRNG) filed its third-quarter result this time last week. The early response was not positive, with shares down 6.2% to kr168 in the past week. It was a workmanlike result, with revenues of kr9.5b coming in 8.7% ahead of expectations, and statutory earnings per share of kr9.54, in line with analyst appraisals. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Following the latest results, Gränges' five analysts are now forecasting revenues of kr41.4b in 2027. This would be a decent 20% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 23% to kr15.52. Before this earnings report, the analysts had been forecasting revenues of kr40.2b and earnings per share (EPS) of kr14.94 in 2027. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

View our latest analysis for Gränges

Despite these upgrades,the analysts have not made any major changes to their price target of kr217, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Gränges at kr230 per share, while the most bearish prices it at kr195. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Gränges' growth to accelerate, with the forecast 15% annualised growth to the end of 2027 ranking favourably alongside historical growth of 9.6% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 10% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Gränges is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Gränges following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at kr217, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Gränges. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Gränges analysts - going out to 2028, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Gränges (1 is significant!) that you need to be mindful of.

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