EN
Earnings Release: Here's Why Analysts Cut Their Suominen Oyj (HEL:SUY1V) Price Target To €0.78
The analysts might have been a bit too bullish on Suominen Oyj (HEL:SUY1V), given that the company fell short of expectations when it released its quarterly results last week. It was a pretty negative result overall, with revenues of €101m missing analyst predictions by 7.2%. Worse, the business reported a statutory loss of €0.02 per share, much larger than the analysts had forecast prior to the result. 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. 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 Suominen Oyj from three analysts is for revenues of €456.6m in 2027. If met, it would imply a decent 15% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 48% to €0.06. Yet prior to the latest earnings, the analysts had been forecasting revenues of €456.6m and losses of €0.03 per share in 2027. So it's pretty clear the analysts have mixed opinions on Suominen Oyj even after this update; although they reconfirmed their revenue numbers, it came at the cost of a considerable increase to per-share losses.
See our latest analysis for Suominen Oyj
With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 13% to €0.78, with the analysts signalling that growing losses would be a definite concern. 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. There are some variant perceptions on Suominen Oyj, with the most bullish analyst valuing it at €1.00 and the most bearish at €0.60 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Suominen Oyj shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Suominen Oyj's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 12% growth to the end of 2027 on an annualised basis. That is well above its historical decline of 2.5% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 3.1% per year. Not only are Suominen Oyj's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Suominen Oyj's future valuation.
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. At Simply Wall St, we have a full range of analyst estimates for Suominen Oyj going out to 2028, and you can see them free on our platform here..
Before you take the next step you should know about the 4 warning signs for Suominen Oyj (2 make us uncomfortable!) that we have uncovered.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.