Analysts Are Updating Their FLSmidth & Co. A/S (CPH:FLS) Estimates After Its Half-Year Results
Investors in FLSmidth & Co. A/S (CPH:FLS) had a good week, as its shares rose 3.5% to close at kr.415 following the release of its half-year results. It looks like weak result overall, with ongoing losses and revenues of kr.7.1b falling short of analyst predictions. The losses were a relative bright spot though, with a per-share (statutory) loss of kr.8.10 being 21% smaller than what the analysts had presumed. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the six analysts covering FLSmidth provided consensus estimates of kr.14.7b revenue in 2025, which would reflect a chunky 16% decline over the past 12 months. Statutory earnings per share are expected to drop 15% to kr.18.15 in the same period. Before this earnings report, the analysts had been forecasting revenues of kr.14.9b and earnings per share (EPS) of kr.14.99 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the very substantial lift in earnings per share expectations following these results.
See our latest analysis for FLSmidth
There's been no major changes to the consensus price target of kr.436, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 FLSmidth at kr.500 per share, while the most bearish prices it at kr.344. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 29% by the end of 2025. This indicates a significant reduction from annual growth of 4.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.1% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - FLSmidth is expected to lag the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around FLSmidth's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that FLSmidth's revenue is expected to perform worse than the wider industry. The consensus price target held steady at kr.436, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for FLSmidth going out to 2027, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with FLSmidth .
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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.