Yahoo Finance Trelleborg AB (publ) Released Earnings Last Week And Analysts Lifted Their Price Target To kr187
Shareholders of Trelleborg AB (publ) (STO:TREL B) will be pleased this week, given that the stock price is up 11% to kr177 following its latest yearly results. Revenues of kr37b arrived in line with expectations, although statutory losses per share were kr0.73, an impressive 338% smaller than what broker models predicted. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Trelleborg
Taking into account the latest results, the most recent consensus for Trelleborg from seven analysts is for revenues of kr37.6b in 2020, which is an okay 2.9% increase on its sales over the past 12 months. Earnings are expected to improve, with Trelleborg forecast to report a statutory profit of kr12.21 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of kr37.3b and earnings per share (EPS) of kr11.97 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target rose 9.7% to kr187, suggesting that higher earnings estimates flow through to the stock's valuation as well. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Trelleborg at kr215 per share, while the most bearish prices it at kr155. 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 Trelleborg shareholders.
In addition, we can look to Trelleborg's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. We would highlight that Trelleborg's revenue growth is expected to slow, with forecast 2.9% increase next year well below the historical 10%p.a. growth over the last five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 1.4% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkTrelleborg will grow faster than the wider market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Trelleborg following these results. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster 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 Trelleborg. Long-term earnings power is much more important than next year's profits. We have forecasts for Trelleborg going out to 2022, and you can see them free on our platform here.
You can also view our analysis of Trelleborg's balance sheet, and whether we think Trelleborg 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
