Yahoo Finance DO & CO Aktiengesellschaft (VIE:DOC) Analysts Are Way More Bearish Than They Used To Be
Today is shaping up negative for DO & CO Aktiengesellschaft (VIE:DOC) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
After the downgrade, the consensus from DO & CO's six analysts is for revenues of €847m in 2021, which would reflect an uneasy 11% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to nosedive 67% to €0.88 in the same period. Before this latest update, the analysts had been forecasting revenues of €1.0b and earnings per share (EPS) of €2.42 in 2021. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.
See our latest analysis for DO & CO
The consensus price target fell 7.8% to €78.35, with the weaker earnings outlook clearly leading analyst valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values DO & CO at €112 per share, while the most bearish prices it at €46.76. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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 the forecast 11% revenue decline a notable change from historical growth of 1.0% 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 4.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - DO & CO 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 DO & CO. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that DO & CO's revenues are expected to grow slower than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of DO & CO.
Unfortunately, the earnings downgrade - if accurate - may also place pressure on DO & CO's mountain of debt, which could lead to some belt tightening for shareholders. See why we're concerned about DO & CO's balance sheet by visiting our risks dashboard for free on our platform here.
We also provide an overview of the DO & CO Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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