Yahoo Finance News Flash: 7 Analysts Think Trigano S.A. (EPA:TRI) Earnings Are Under Threat
Market forces rained on the parade of Trigano S.A. (EPA:TRI) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
After the downgrade, the consensus from Trigano's seven analysts is for revenues of €2.1b in 2020, which would reflect an uncomfortable 8.7% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to plunge 23% to €6.66 in the same period. Prior to this update, the analysts had been forecasting revenues of €2.3b and earnings per share (EPS) of €8.04 in 2020. From this we can that analyst sentiment has definitely become more bearish after the latest update, leading to lower revenue forecasts and a real cut to earnings per share estimates.
View our latest analysis for Trigano
The consensus price target fell 13% to €87.80, with the weaker earnings outlook clearly leading analyst valuation estimates. 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 Trigano analyst has a price target of €110 per share, while the most pessimistic values it at €51.10. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Trigano's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 8.7%, a significant reduction from annual growth of 22% 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 0.5% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Trigano 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 Trigano. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Trigano.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Trigano going out to 2024, 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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