Yahoo Finance Blue Cap AG (ETR:B7E) Analysts Are Reducing Their Forecasts For This Year
The latest analyst coverage could presage a bad day for Blue Cap AG (ETR:B7E), 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) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, the current consensus, from the twin analysts covering Blue Cap, is for revenues of €287m in 2023, which would reflect a definite 18% reduction in Blue Cap's sales over the past 12 months. Statutory earnings per share are anticipated to crater 85% to €0.42 in the same period. Prior to this update, the analysts had been forecasting revenues of €333m and earnings per share (EPS) of €0.69 in 2023. Indeed, we can see that the analysts are a lot more bearish about Blue Cap's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
Check out our latest analysis for Blue Cap
It'll come as no surprise then, to learn that the analysts have cut their price target 6.1% to €35.70. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Blue Cap analyst has a price target of €38.00 per share, while the most pessimistic values it at €33.40. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Blue Cap is an easy business to forecast or the underlying assumptions are obvious.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 18% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 16% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 0.9% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Blue Cap is expected to lag 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 Blue Cap. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Blue Cap's revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Blue Cap going out as far as 2025, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks 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.
