Revenue Downgrade: Here's What Analysts Forecast For UBM Development AG (VIE:UBS)

One thing we could say about the analysts on UBM Development AG (VIE:UBS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the four analysts covering UBM Development are now predicting revenues of €252m in 2022. If met, this would reflect a solid 17% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 34% to €3.90. Prior to this update, the analysts had been forecasting revenues of €305m and earnings per share (EPS) of €4.72 in 2022. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a real cut to earnings per share numbers as well.

Check out our latest analysis for UBM Development

Analysts made no major changes to their price target of €49.10, suggesting the downgrades are not expected to have a long-term impact on UBM Development's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values UBM Development at €55.00 per share, while the most bearish prices it at €41.80. 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. One thing stands out from these estimates, which is that UBM Development is forecast to grow faster in the future than it has in the past, with revenues expected to display 23% annualised growth until the end of 2022. If achieved, this would be a much better result than the 17% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 1.3% per year. So it looks like UBM Development is expected to grow faster than its competitors, at least for a while.

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 UBM Development. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on UBM Development after today.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for UBM Development going out to 2024, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.