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Market forces rained on the parade of Energiekontor AG (ETR:EKT) shareholders today, when the analysts downgraded their forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
After this downgrade, Energiekontor's two analysts are now forecasting revenues of €219m in 2025. This would be a major 73% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 165% to €4.30. Prior to this update, the analysts had been forecasting revenues of €267m and earnings per share (EPS) of €4.48 in 2025. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a minor downgrade to earnings per share numbers as well.
Check out our latest analysis for Energiekontor
Despite the cuts to forecast earnings, there was no real change to the €129 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Energiekontor's growth to accelerate, with the forecast 73% annualised growth to the end of 2025 ranking favourably alongside historical growth of 17% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Energiekontor to grow faster than the wider industry.
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 Energiekontor. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Energiekontor going forwards.
That said, the analysts might have good reason to be negative on Energiekontor, given its declining profit margins. Learn more, and discover the 3 other flags we've identified, for free on our platform here.
