The analysts covering Saga plc (LON:SAGA) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the latest downgrade, the four analysts covering Saga provided consensus estimates of UK£465m revenue in 2021, which would reflect a painful 42% decline on its sales over the past 12 months. Before the latest update, the analysts were foreseeing UK£536m of revenue in 2021. The consensus view seems to have become more pessimistic on Saga, noting the measurable cut to revenue estimates in this update.
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. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue shrink 24% per year. While this is interesting, Saga's, revenues are still expected to shrink next year, and at a faster rate than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Saga this year. They're also forecasting for revenues to shrink at a quicker rate than companies in the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Saga after today.
But wait - there's more! We have estimates for Saga from its four analysts out until 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.
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. 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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