It's shaping up to be a tough period for Europris ASA (OB:EPR), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at kr3.5b, statutory earnings missed forecasts by 14%, coming in at just kr0.79 per share. 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.
After the latest results, the five analysts covering Europris are now predicting revenues of kr15.9b in 2027. If met, this would reflect an okay 5.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 30% to kr6.63. Before this earnings report, the analysts had been forecasting revenues of kr16.1b and earnings per share (EPS) of kr6.83 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
View our latest analysis for Europris
It might be a surprise to learn that the consensus price target was broadly unchanged at kr96.20, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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. The most optimistic Europris analyst has a price target of kr110 per share, while the most pessimistic values it at kr88.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Europris is an easy business to forecast or the the analysts are all using similar assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Europris' revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 4.5% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 10% annually. Factoring in the forecast slowdown in growth, it seems obvious that Europris is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Europris. 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.
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 Europris going out to 2028, and you can see them free on our platform here.
It might also be worth considering whether Europris' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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