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Results: Eltel AB (publ) Exceeded Expectations And The Consensus Has Updated Its Estimates
It's been a good week for Eltel AB (publ) (STO:ELTEL) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.4% to kr16.70. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at €196m, statutory earnings beat expectations by a notable 25%, coming in at €0.05 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Eltel's two analysts is for revenues of €866.6m in 2027. This reflects a modest 4.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 85% to €0.11. In the lead-up to this report, the analysts had been modelling revenues of €907.7m and earnings per share (EPS) of €0.12 in 2027. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.
See our latest analysis for Eltel
The average price target climbed 21% to kr18.29despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Eltel's rate of growth is expected to accelerate meaningfully, with the forecast 3.9% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 0.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Eltel is expected to grow at about the same rate as the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Eltel. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Eltel going out as far as 2028, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for Eltel (of which 1 is a bit concerning!) you should know about.
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