Yahoo Finance Analysts Just Slashed Their Getlink SE (EPA:GET) EPS Numbers
The analysts covering Getlink SE (EPA:GET) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the downgrade, the consensus from eleven analysts covering Getlink is for revenues of €831m in 2020, implying a stressful 23% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to nosedive 89% to €0.033 in the same period. Before this latest update, the analysts had been forecasting revenues of €983m and earnings per share (EPS) of €0.057 in 2020. Indeed, we can see that the analysts are a lot more bearish about Getlink's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
View our latest analysis for Getlink
Analysts made no major changes to their price target of €13.35, suggesting the downgrades are not expected to have a long-term impact on Getlink'svaluation. 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. There are some variant perceptions on Getlink, with the most bullish analyst valuing it at €18.00 and the most bearish at €9.00 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 23% revenue decline a notable change from historical growth of 0.2% 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 4.2% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Getlink is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Getlink after the downgrade.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Getlink analysts - going out to 2023, 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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