The latest analyst coverage could presage a bad day for SBF AG (FRA:CY1K), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.
Following the latest downgrade, SBF's two analysts currently expect revenues in 2023 to be €34m, approximately in line with the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 87% to €0.025. Prior to this update, the analysts had been forecasting revenues of €39m and earnings per share (EPS) of €0.075 in 2023. So we can see that the consensus has become notably more bearish on SBF's outlook with these numbers, making a measurable cut to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.
See our latest analysis for SBF
The consensus price target fell 7.1% to €9.80, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.
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. We would highlight that SBF's revenue growth is expected to slow, with the forecast 1.1% annualised growth rate until the end of 2023 being well below the historical 20% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.9% 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 SBF.
The Bottom Line
The biggest low-light for us was that the forecasts for SBF dropped from profits to a loss this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of SBF.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for SBF going out as far as 2025, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.