Earnings Release: Here's Why Analysts Cut Their Husqvarna AB (publ) (STO:HUSQ B) Price Target To kr34.20
Last week, you might have seen that Husqvarna AB (publ) (STO:HUSQ B) released its quarterly result to the market. The early response was not positive, with shares down 6.9% to kr33.24 in the past week. It was a pretty bad result overall; while revenues were in line with expectations at kr9.0b, statutory losses exploded to kr0.70 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 Husqvarna are now predicting revenues of kr46.9b in 2027. If met, this would reflect a modest 4.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 50% to kr2.70. In the lead-up to this report, the analysts had been modelling revenues of kr47.3b and earnings per share (EPS) of kr3.11 in 2027. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.
See our latest analysis for Husqvarna
The average price target fell 15% to kr34.20, with reduced earnings forecasts clearly tied to a lower valuation estimate. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Husqvarna analyst has a price target of kr35.00 per share, while the most pessimistic values it at kr33.00. This is a very narrow spread of estimates, implying either that Husqvarna is an easy company to value, or - more likely - the analysts are relying heavily on some key 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. One thing stands out from these estimates, which is that Husqvarna is forecast to grow faster in the future than it has in the past, with revenues expected to display 3.8% annualised growth until the end of 2027. If achieved, this would be a much better result than the 2.1% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.2% annually for the foreseeable future. Although Husqvarna's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Husqvarna's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Husqvarna analysts - going out to 2028, and you can see them free on our platform here.
You still need to take note of risks, for example - Husqvarna has 2 warning signs we think you should be aware of.
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