Analysts Have Been Trimming Their Hexagon Composites ASA (OB:HEX) Price Target After Its Latest Report
Hexagon Composites ASA (OB:HEX) defied analyst predictions to release its third-quarter results, which were ahead of market expectations. Revenues and losses per share were both better than expected, with revenues of kr929m leading estimates by 9.4%. Statutory losses were smaller than the analystsexpected, coming in at kr0.14 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the four analysts covering Hexagon Composites are now predicting revenues of kr4.15b in 2027. If met, this would reflect a major 36% improvement in revenue compared to the last 12 months. Hexagon Composites is also expected to turn profitable, with statutory earnings of kr0.28 per share. Before this earnings report, the analysts had been forecasting revenues of kr4.43b and earnings per share (EPS) of kr0.16 in 2027. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the sizeable expansion in to the earnings per share numbers.
Check out our latest analysis for Hexagon Composites
The analysts have cut their price target 8.8% to kr18.25per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Hexagon Composites at kr20.00 per share, while the most bearish prices it at kr14.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. For example, we noticed that Hexagon Composites' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 28% growth to the end of 2027 on an annualised basis. That is well above its historical decline of 3.2% a year 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 11% annually. Not only are Hexagon Composites' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Hexagon Composites following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Hexagon Composites' future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Hexagon Composites going out to 2028, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for Hexagon Composites that you need to take into consideration.
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