Vår Energi ASA Just Missed EPS By 39%: Here's What Analysts Think Will Happen Next
Investors in Vår Energi ASA (OB:VAR) had a good week, as its shares rose 5.7% to close at kr58.94 following the release of its third-quarter results. Revenue of US$3.6b surpassed estimates by 5.0%, although statutory earnings per share missed badly, coming in 39% below expectations at US$0.11 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.
Taking into account the latest results, the current consensus from Vår Energi's 13 analysts is for revenues of US$12.5b in 2027. This would reflect a modest 3.1% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be US$0.59, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$11.7b and earnings per share (EPS) of US$0.51 in 2027. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice increase in earnings per share in particular.
Check out our latest analysis for Vår Energi
With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.8% to kr55.47per share. 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 Vår Energi, with the most bullish analyst valuing it at kr69.62 and the most bearish at kr41.63 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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 Vår Energi's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 2.5% growth on an annualised basis. This is compared to a historical growth rate of 5.4% over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 6.8% annually. So it's clear that despite the slowdown in growth, Vår Energi is still expected to grow meaningfully faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Vår Energi's earnings potential next year. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider industry. There was also a nice increase in the price target, with the analysts 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 Vår Energi. Long-term earnings power is much more important than next year's profits. We have forecasts for Vår Energi going out to 2028, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 3 warning signs for Vår Energi (of which 1 is a bit unpleasant!) you should know about.
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