BHG Group AB (publ) Just Missed Earnings - But Analysts Have Updated Their Models
It's been a mediocre week for BHG Group AB (publ) (STO:BHG) shareholders, with the stock dropping 12% to kr19.53 in the week since its latest second-quarter results. Results overall were not great, with earnings of kr0.31 per share falling drastically short of analyst expectations. Meanwhile revenues hit kr3.0b and were slightly better than forecasts. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from BHG Group's three analysts is for revenues of kr11.3b in 2026. This would reflect a reasonable 3.5% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 134% to kr1.17. In the lead-up to this report, the analysts had been modelling revenues of kr11.1b and earnings per share (EPS) of kr1.30 in 2026. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
See our latest analysis for BHG Group
It might be a surprise to learn that the consensus price target fell 10% to kr29.00, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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. The most optimistic BHG Group analyst has a price target of kr38.00 per share, while the most pessimistic values it at kr21.00. 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.
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. One thing stands out from these estimates, which is that BHG Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 7.1% annualised growth until the end of 2026. If achieved, this would be a much better result than the 4.9% annual decline 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 3.8% per year. So it looks like BHG Group is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for BHG Group. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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.
With that in mind, we wouldn't be too quick to come to a conclusion on BHG Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for BHG Group going out to 2028, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for BHG Group that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.