Exel Composites Oyj Just Missed EPS By 38%: Here's What Analysts Think Will Happen Next
Exel Composites Oyj (HEL:EXL1V) shares fell 3.2% to €6.14 in the week since its latest annual results. It looks like a pretty bad result, all things considered. Although revenues of €104m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 38% to hit €0.20 per share. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
Check out our latest analysis for Exel Composites Oyj
After the latest results, the two analysts covering Exel Composites Oyj are now predicting revenues of €108.8m in 2020. If met, this would reflect an okay 4.8% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to surge 133% to €0.47. Yet prior to the latest earnings, analysts had been forecasting revenues of €111.2m and earnings per share (EPS) of €0.51 in 2020. It's pretty clear that analyst sentiment has fallen after the latest results, leading to lower revenue forecasts and a minor downgrade to earnings per share estimates.
The average price target climbed 7.7% to €6.63 despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.
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 Exel Composites Oyj's revenue growth will slow down substantially, with revenues next year expected to grow 4.8%, compared to a historical growth rate of 6.1% over the past five years. Compare this against other companies (with analyst forecasts) in the market, which are in aggregate expected to see revenue growth of 5.7% next year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Exel Composites Oyj to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Exel Composites Oyj. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.
You can also view our analysis of Exel Composites Oyj's balance sheet, and whether we think Exel Composites Oyj is carrying too much debt, 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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