Investors in Haldex AB (publ) (STO:HLDX) had a good week, as its shares rose 6.5% to close at kr54.40 following the release of its first-quarter results. It looks to have been a decent result overall – while revenue fell marginally short of analyst estimates at kr1.1b, statutory earnings beat expectations by a notable 63%, coming in at kr1.94 per share. Earnings are an important time for investors, as they can track a company’s performance, look at what the analyst is forecasting for next year, and see if there’s been a change in sentiment towards the company. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Haldex from sole analyst is for revenues of kr4.39b in 2021 which, if met, would be a meaningful 12% increase on its sales over the past 12 months. Haldex is also expected to turn profitable, with statutory earnings of kr4.72 per share. In the lead-up to this report, the analyst had been modelling revenues of kr4.39b and earnings per share (EPS) of kr4.80 in 2021. The consensus analyst doesn’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.
With the analyst reconfirming their revenue and earnings forecasts, it’s surprising to see that the price target rose 13% to kr62.00. It looks as though they previously had some doubts over whether the business would live up to their expectations.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analyst is definitely expecting Haldex’s growth to accelerate, with the forecast 17% annualised growth to the end of 2021 ranking favourably alongside historical growth of 0.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Haldex to grow faster 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 analyst holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations – and our data suggests that revenues are expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analyst clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn’t be too quick to come to a conclusion on Haldex. Long-term earnings power is much more important than next year’s profits. We have analyst estimates for Haldex going out as far as 2023, and you can see them free on our platform here.
You still need to take note of risks, for example – Haldex has 2 warning signs (and 1 which can’t be ignored) we think you should know about.
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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. 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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