Fagerhult Group AB Just Reported A Surprise Profit And Analysts Updated Their Estimates

One of the biggest stories of last week was how Fagerhult Group AB (STO:FAG) shares plunged 26% in the week since its latest quarterly results, closing yesterday at kr13.06. Revenues of kr1.9b reported a marginal miss, falling short of forecasts by 8.0%, but earnings were better than expected - statutory profits came in at kr0.05 per share, a nice change from the loss the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, Fagerhult Group's three analysts currently expect revenues in 2027 to be kr7.84b, approximately in line with the last 12 months. Per-share earnings are expected to jump 49% to kr0.88. Before this earnings report, the analysts had been forecasting revenues of kr8.14b and earnings per share (EPS) of kr0.96 in 2027. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

Check out our latest analysis for Fagerhult Group

It'll come as no surprise then, to learn that the analysts have cut their price target 19% to kr16.00. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Fagerhult Group, with the most bullish analyst valuing it at kr20.00 and the most bearish at kr13.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Fagerhult Group'shistorical trends, as the 1.1% annualised revenue growth to the end of 2027 is roughly in line with the 1.0% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 10% per year. So it's pretty clear that Fagerhult Group is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Fagerhult Group going out to 2028, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 4 warning signs for Fagerhult Group (of which 2 are significant!) you should know about.

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