Norsk Hydro ASA Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
As you might know, Norsk Hydro ASA (OB:NHY) recently reported its second-quarter numbers. Revenues were kr56b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at kr2.90, an impressive 58% ahead of estimates. 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. 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 consensus forecast from Norsk Hydro's 15 analysts is for revenues of kr213.0b in 2026. This reflects an okay 4.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 86% to kr9.22. In the lead-up to this report, the analysts had been modelling revenues of kr213.4b and earnings per share (EPS) of kr8.76 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
See our latest analysis for Norsk Hydro
There's been no major changes to the consensus price target of kr97.06, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Norsk Hydro, with the most bullish analyst valuing it at kr137 and the most bearish at kr55.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. It's clear from the latest estimates that Norsk Hydro's rate of growth is expected to accelerate meaningfully, with the forecast 8.3% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 6.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Norsk Hydro is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Norsk Hydro following these results. 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 held steady at kr97.06, with the latest estimates not enough to have an impact on their price targets.
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 Norsk Hydro analysts - going out to 2028, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Norsk Hydro 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.