It's been a pretty great week for Konecranes Plc (HEL:KCR) shareholders, with its shares surging 19% to €32.60 in the week since its latest annual results. Statutory earnings per share fell badly short of expectations, coming in at €1.03, some 24% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at €3.3b. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
View our latest analysis for Konecranes
After the latest results, the nine analysts covering Konecranes are now predicting revenues of €3.54b in 2020. If met, this would reflect a satisfactory 6.4% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to soar 117% to €2.23. Before this earnings report, analysts had been forecasting revenues of €3.47b and earnings per share (EPS) of €2.29 in 2020. Analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share forecasts for next year.
Despite cutting their earnings forecasts, analysts have lifted their price target 6.0% to €35.52, suggesting that these impacts are not expected to weigh on the stock's value in the long term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Konecranes at €42.00 per share, while the most bearish prices it at €25.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that analysts expect Konecranes's revenue growth will slow down substantially, with revenues next year expected to grow 6.4%, compared to a historical growth rate of 12% over the past five years. Compare this to the other companies in this market with analyst coverage, which are forecast to grow their revenue at 5.7% per year. So it's pretty clear that, while Konecranes's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Konecranes. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for Konecranes going out to 2024, and you can see them free on our platform here.
You can also see whether Konecranes is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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