Need To Know: The Consensus Just Cut Its Kinepolis Group NV (EBR:KIN) Estimates For 2020

One thing we could say about the analysts on Kinepolis Group NV (EBR:KIN) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After the downgrade, the consensus from Kinepolis Group's three analysts is for revenues of €199m in 2020, which would reflect a sizeable 53% decline in sales compared to the last year of performance. After this downgrade, the company is anticipated to report a loss of €2.36 in 2020, a sharp decline from a profit over the last year. Yet before this consensus update, the analysts had been forecasting revenues of €199m and losses of €2.36 per share in 2020. So it looks like there's been no real change in sentiment in this consensus update, with the analysts reconfirming both their revenue and loss per share numbers.

View our latest analysis for Kinepolis Group

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 53% revenue decline a notable change from historical growth of 13% 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 11% annually for the foreseeable future. It's pretty clear that Kinepolis Group's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Kinepolis Group is moving incrementally towards profitability. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data indicates that Kinepolis Group's revenues are expected to grow slower than 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 Kinepolis Group after today.

That said, the analysts might have good reason to be negative on Kinepolis Group, given its declining profit margins. For more information, you can click here to discover this and the 3 other concerns we've identified.

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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