Results: Kesko Oyj Exceeded Expectations And The Consensus Has Updated Its Estimates
As you might know, Kesko Oyj (HEL:KESKOB) recently reported its third-quarter numbers. The result was positive overall - although revenues of €3.4b were in line with what the analysts predicted, Kesko Oyj surprised by delivering a statutory profit of €0.41 per share, modestly greater than expected. The 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'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 consensus forecast from Kesko Oyj's six analysts is for revenues of €14.9b in 2027. This reflects a meaningful 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 21% to €1.35. Yet prior to the latest earnings, the analysts had been anticipated revenues of €14.3b and earnings per share (EPS) of €1.36 in 2027. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a slight bump in to revenue forecasts.
See our latest analysis for Kesko Oyj
The analysts increased their price target 7.6% to €24.20, perhaps signalling that higher revenues are a strong leading indicator for Kesko Oyj's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Kesko Oyj at €27.00 per share, while the most bearish prices it at €20.00. This is a very narrow spread of estimates, implying either that Kesko Oyj is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Kesko Oyj's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 2.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.0% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Kesko Oyj to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 Kesko 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 2 warning signs for Kesko Oyj that we have uncovered.
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