Brokers

Analyst Estimates: Here’s What Brokers Think Of Kitron ASA (OB:KIT) After Its Annual Report

Investors in Kitron ASA (OB:KIT) had a good week, as its shares rose 4.5% to close at kr35.00 following the release of its full-year results. Kitron reported €775m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of €0.27 beat expectations, being 2.8% higher than what the analysts 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Kitron

OB:KIT Earnings and Revenue Growth February 18th 2024

Following last week’s earnings report, Kitron’s three analysts are forecasting 2024 revenues to be €766.4m, approximately in line with the last 12 months. Statutory earnings per share are expected to decrease 8.9% to €0.23 in the same period. In the lead-up to this report, the analysts had been modelling revenues of €777.2m and earnings per share (EPS) of €0.24 in 2024. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at kr39.00. 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. The most optimistic Kitron analyst has a price target of kr41.00 per share, while the most pessimistic values it at kr37.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. We would highlight that revenue is expected to reverse, with a forecast 1.1% annualised decline to the end of 2024. That is a notable change from historical growth of 21% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 19% annually for the foreseeable future. It’s pretty clear that Kitron’s revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion is that there’s been no major change in the business’ prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn’t be too quick to come to a conclusion on Kitron. Long-term earnings power is much more important than next year’s profits. We have forecasts for Kitron going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example – Kitron has 2 warning signs we think you should be aware of.

Valuation is complex, but we’re helping make it simple.

Find out whether Kitron is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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.

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