There's been a major selloff in Borgestad ASA (OB:BOR) shares in the week since it released its full-year report, with the stock down 35% to kr12.40. It looks like the results were pretty good overall. While revenues of kr919m were in line with analyst predictions, statutory losses were much smaller than expected, with Borgestad losing kr6.20 per share. Following the result, 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. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.

See our latest analysis for Borgestad

Taking into account the latest results, the current consensus from Borgestad's only analyst is for revenues of kr956.0m in 2020, which would reflect a reasonable 4.1% increase on its sales over the past 12 months. Earnings are expected to improve, with Borgestad forecast to report a statutory profit of kr0.51 per share. Yet prior to the latest earnings, analysts had been forecasting revenues of kr985.0m and earnings per share (EPS) of kr1.05 in 2020. From this we can that analyst sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

It'll come as no surprise then, to learn that analysts have cut their price target 6.9% to kr27.00.

It can also be useful to step back and take a broader view of how analyst forecasts compare to Borgestad's performance in recent years. Next year brings more of the same, according to analysts, with revenue forecast to grow 4.1%, in line with its 3.9% annual growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 3.6% next year. So although Borgestad is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider market.

The Bottom Line

The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Borgestad's future valuation.

Still, 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 2022, which can be seen for free on our platform here.