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Some Analysts Just Cut Their The Carlyle Group Inc. (NASDAQ:CG) Estimates

One thing we could say about the analysts on The Carlyle Group Inc. (NASDAQ:CG) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the consensus from Carlyle Group's eleven analysts is for revenues of US$3.4b in 2023, which would reflect a definite 9.8% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of US$3.9b in 2023. The consensus view seems to have become more pessimistic on Carlyle Group, noting the measurable cut to revenue estimates in this update.

View our latest analysis for Carlyle Group

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earnings-and-revenue-growth

Notably, the analysts have cut their price target 9.3% to US$37.38, suggesting concerns around Carlyle Group's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Carlyle Group at US$55.00 per share, while the most bearish prices it at US$28.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

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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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 13% by the end of 2023. This indicates a significant reduction from annual growth of 20% 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 8.6% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Carlyle Group is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also anticipating slower revenue growth 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 Carlyle Group's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Carlyle Group going forwards.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Carlyle Group's financials, such as its declining profit margins. For more information, you can click here to discover this and the 2 other flags we've identified.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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