The latest analyst coverage could presage a bad day for AB SKF (publ) (STO:SKF B), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the downgrade, the consensus from ten analysts covering AB SKF is for revenues of kr76b in 2027, implying a not inconsiderable 17% decline in sales compared to the last 12 months. Statutory earnings per share are presumed to soar 35% to kr16.40. Prior to this update, the analysts had been forecasting revenues of kr96b and earnings per share (EPS) of kr17.06 in 2027. It looks like analyst sentiment has fallen somewhat in this update, with a pretty serious reduction to revenue estimates and a small dip in earnings per share numbers as well.
Check out our latest analysis for AB SKF
Analysts made no major changes to their price target of kr274, suggesting the downgrades are not expected to have a long-term impact on AB SKF's valuation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 14% annualised revenue decline to the end of 2027. That is a notable change from historical growth of 0.2% 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 8.1% annually for the foreseeable future. It's pretty clear that AB SKF's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for AB SKF. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on AB SKF after today.
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 AB SKF going out to 2028, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.
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