Ferronordic AB (STO:FNM) just released its latest annual report and things are not looking great. Results look to have been somewhat negative - revenue fell 3.2% short of analyst estimates at kr3.7b, and statutory earnings of kr17.26 per share missed forecasts by 6.7%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Ferronordic after the latest results.

See our latest analysis for Ferronordic

Taking into account the latest results, the most recent consensus for Ferronordic from three analysts is for revenues of kr5.72b in 2020, which is a major 53% increase on its sales over the past 12 months. Statutory earnings per share are forecast to dip 8.1% to kr15.86 in the same period. In the lead-up to this report, analysts had been modelling revenues of kr5.87b and earnings per share (EPS) of kr18.65 in 2020. From this we can that analyst sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

The average price target climbed 5.1% to kr205 despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Ferronordic, with the most bullish analyst valuing it at kr205 and the most bearish at kr205 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.

It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Ferronordic's past performance and to peers in the same market. It's clear from the latest estimates that Ferronordic's rate of growth is expected to accelerate meaningfully, with forecast 53% revenue growth noticeably faster than its historical growth of 18%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect Ferronordic to grow faster than the wider market.

The Bottom Line

The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately analysts also downgraded their revenue estimates, although industry data suggests that Ferronordic's revenues are expected 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.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Ferronordic analysts - going out to 2024, and you can see them free on our platform here.

You can also view our analysis of Ferronordic's balance sheet, and whether we think Ferronordic 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.