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One thing we could say about the covering analyst on DATRON AG (ETR:DAR) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business. The stock price has risen 5.1% to €8.25 over the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.
Following the latest downgrade, the current consensus, from the solitary analyst covering DATRON, is for revenues of €61m in 2024, which would reflect a measurable 5.3% reduction in DATRON's sales over the past 12 months. Statutory earnings per share are supposed to plummet 59% to €0.46 in the same period. Before this latest update, the analyst had been forecasting revenues of €68m and earnings per share (EPS) of €0.90 in 2024. Indeed, we can see that the analyst is a lot more bearish about DATRON's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
Check out our latest analysis for DATRON
It'll come as no surprise then, to learn that the analyst has cut their price target 11% to €15.91.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 5.3% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 4.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.5% annually for the foreseeable future. It's pretty clear that DATRON's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for DATRON. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of DATRON.
After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with DATRON's business, like concerns around earnings quality. Learn more, and discover the 1 other flag we've identified, for free on our platform here.