Analysts Are Updating Their AB Volvo (publ) (STO:VOLV B) Estimates After Its Third-Quarter Results

As you might know, AB Volvo (publ) (STO:VOLV B) last week released its latest quarterly, and things did not turn out so great for shareholders. Results look to have been somewhat negative - revenue fell 4.5% short of analyst estimates at kr120b, and statutory earnings of kr5.29 per share missed forecasts by 3.5%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on AB Volvo after the latest results.

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Taking into account the latest results, the current consensus from AB Volvo's 21 analysts is for revenues of kr543.7b in 2027. This would reflect a solid 13% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 31% to kr25.15. In the lead-up to this report, the analysts had been modelling revenues of kr549.0b and earnings per share (EPS) of kr25.57 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

Check out our latest analysis for AB Volvo

The analysts reconfirmed their price target of kr354, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values AB Volvo at kr450 per share, while the most bearish prices it at kr285. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that AB Volvo's rate of growth is expected to accelerate meaningfully, with the forecast 10% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 4.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that AB Volvo is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple AB Volvo analysts - going out to 2028, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for AB Volvo you should be aware of, and 1 of them makes us a bit uncomfortable.

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