Earnings Miss: UPM-Kymmene Oyj Missed EPS By 46% And Analysts Are Revising Their Forecasts
UPM-Kymmene Oyj (HEL:UPM) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Results showed a clear earnings miss, with €2.3b revenue coming in 3.0% lower than what the analystsexpected. Statutory earnings per share (EPS) of €0.15 missed the mark badly, arriving some 46% below what was expected. 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. 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 UPM-Kymmene Oyj's 15 analysts is for revenues of €9.89b in 2027. This reflects a reasonable 4.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 32% to €1.72. In the lead-up to this report, the analysts had been modelling revenues of €9.96b and earnings per share (EPS) of €1.87 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
View our latest analysis for UPM-Kymmene Oyj
It might be a surprise to learn that the consensus price target was broadly unchanged at €24.63, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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 UPM-Kymmene Oyj at €29.00 per share, while the most bearish prices it at €17.60. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. One thing stands out from these estimates, which is that UPM-Kymmene Oyj is forecast to grow faster in the future than it has in the past, with revenues expected to display 3.3% annualised growth until the end of 2027. If achieved, this would be a much better result than the 2.0% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 2.6% annually. Not only are UPM-Kymmene Oyj's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for UPM-Kymmene Oyj. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at €24.63, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for UPM-Kymmene Oyj going out to 2028, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for UPM-Kymmene Oyj that we have uncovered.
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