What You Need To Know About The Ackermans & Van Haaren NV (EBR:ACKB) Analyst Downgrade Today

The latest analyst coverage could presage a bad day for Ackermans & Van Haaren NV (EBR:ACKB), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the current consensus, from the two analysts covering Ackermans & Van Haaren, is for revenues of €2.1b in 2022, which would reflect a stressful 52% reduction in Ackermans & Van Haaren's sales over the past 12 months. Per-share earnings are expected to jump 34% to €16.41. Before this latest update, the analysts had been forecasting revenues of €4.3b and earnings per share (EPS) of €16.89 in 2022. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a pretty serious reduction to revenue estimates and a minor downgrade to EPS estimates to boot.

Check out our latest analysis for Ackermans & Van Haaren

It'll come as no surprise then, to learn that the analysts have cut their price target 6.4% to €171. 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 Ackermans & Van Haaren at €195 per share, while the most bearish prices it at €150. This is a very narrow spread of estimates, implying either that Ackermans & Van Haaren is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 52% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 0.8% 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 5.1% annually for the foreseeable future. It's pretty clear that Ackermans & Van Haaren's revenues are expected to perform substantially worse than 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 Ackermans & Van Haaren. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Ackermans & Van Haaren's revenues are expected to grow slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Ackermans & Van Haaren going forwards.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Ackermans & Van Haaren going out as far as 2024, and you can see them free on our platform here.

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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.