Yahoo Finance Time To Worry? Analysts Are Downgrading Their CENIT Aktiengesellschaft (ETR:CSH) Outlook
Today is shaping up negative for CENIT Aktiengesellschaft (ETR:CSH) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.
Following the downgrade, the consensus from twin analysts covering CENIT is for revenues of €161m in 2020, implying a measurable 6.0% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to plunge 60% to €0.33 in the same period. Previously, the analysts had been modelling revenues of €179m and earnings per share (EPS) of €0.87 in 2020. 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.
View our latest analysis for CENIT
It'll come as no surprise then, to learn that the analysts have cut their price target 5.3% to €17.93. 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 CENIT at €19.85 per share, while the most bearish prices it at €16.00. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with the forecast 6.0% revenue decline a notable change from historical growth of 9.5% 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 6.9% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - CENIT 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that CENIT's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of CENIT.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2024, which can be seen for 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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