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The latest analyst coverage could presage a bad day for Alfen N.V. (AMS:ALFEN), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Surprisingly the share price has been buoyant, rising 10% to €18.50 in the past 7 days. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.
Following the downgrade, the current consensus from Alfen's ten analysts is for revenues of €531m in 2024 which - if met - would reflect a satisfactory 5.3% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to plummet 77% to €0.31 in the same period. Before this latest update, the analysts had been forecasting revenues of €593m and earnings per share (EPS) of €1.57 in 2024. Indeed, we can see that the analysts are a lot more bearish about Alfen's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
View our latest analysis for Alfen
The consensus price target fell 43% to €28.65, with the weaker earnings outlook clearly leading analyst valuation estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Alfen's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.3% growth on an annualised basis. This is compared to a historical growth rate of 32% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.6% annually. Factoring in the forecast slowdown in growth, it seems obvious that Alfen is also expected to grow slower than other industry participants.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Alfen. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Alfen's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Alfen after today.