It’s been a mediocre week for Meko AB (publ) (STO:MEKO) shareholders, with the stock dropping 19% to kr57.00 in the week since its latest quarterly results. Results look mixed – while revenue fell marginally short of analyst estimates at kr4.4b, statutory earnings were in line with expectations, at kr0.64 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from Meko’s twin analysts is for revenues of kr18.6b in 2027. This would reflect a satisfactory 2.3% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 97% to kr6.63. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr19.0b and earnings per share (EPS) of kr8.12 in 2027. So there’s definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
Check out our latest analysis for Meko
The average price target fell 11% to kr77.50, with reduced earnings forecasts clearly tied to a lower valuation estimate.
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. It’s pretty clear that there is an expectation that Meko’s revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 1.8% growth on an annualised basis. This is compared to a historical growth rate of 8.5% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.8% per year. So it’s pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Meko.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Meko. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it’s tracking in line with expectations. Although our data does suggest that Meko’s revenue is expected to 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 Meko’s future valuation.
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. At least one analyst has provided forecasts out to 2028, which can be seen for free on our platform here.
Before you take the next step you should know about the 1 warning sign for Meko that we have uncovered.
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