Buying long, selling Langer: Analysts continue to upgrade the C2O companies

Morten is the editor-in-chief and owner of Økonomisk Ugebrev (Economics Weekly), which for over 20 years has provided analysis on companies, finance and economic policy to Danish leaders, along with advice on equity investments to private investors. ØU is respected as a sober and critical observer of business, governments and finance.

Danish and foreign analysts are very optimistic about the prospective profits among the Danish C20 companies for 2015. AktieUgebrevet has taken the pulse of analysts’ adjustments in their estimates over the past four weeks and the past 12 weeks.

Rosy picture
The picture is that only a single company has had its average expected EPS profit trimmed for 2015 – namely Carlsberg. In the past month there has been a downward adjustment of 2 percent and over the past three months it has been adjusted down by five percent.

In the past month the expected profit for AP Møller is down by just 1 percent and in the past three months there is still a positive development of 1 percent. We consider the analysts’ optimism to be excessive as the negative effects from lower oil prices can hardly be avoided, even if a large part of the fall in income will be offset by lower bunkering costs in the container business.

Hearing difficulties
The analysts also have a certain reservation about the hearing aid company William Demant: over the past three months the expected 2015 profit has been adjusted down by 2 percent, while there has been an adjustment up of 1 percent in the past month.

The analysts are positive about the rest of the C20 companies when it comes to projected profits in 2015. A table of the analysts’ changes to their estimates over the past four weeks and the past 12 weeks as well as the expected price to earning ratio, based on the expected 2015 profits, can be seen here.

Greatest expectations
The analysts obviously have the biggest expectations for increased profit growth for Pandora and Jyske Bank. In the past three months, the expectations for their 2015 profits have been adjusted up by 12 percent and 8 percent respectively. But we are somewhat sceptical about Jyske Bank. It is evident that synergies following its merger with BRFkredit will be apparent and tangible, but Jyske Bank is heavily exposed to farming, which is facing tough
times.

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