What You Need To Know About The Bâloise Holding AG (VTX:BALN) Analyst Downgrade Today

The analysts covering Bâloise Holding AG (VTX:BALN) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the five analysts covering Bâloise Holding provided consensus estimates of CHF7.0b revenue in 2021, which would reflect a chunky 18% decline on its sales over the past 12 months. Per-share earnings are expected to shoot up 39% to CHF13.40. Previously, the analysts had been modelling revenues of CHF8.5b and earnings per share (EPS) of CHF13.45 in 2021. Indeed we can see that the consensus opinion has undergone some fundamental changes following the recent consensus updates, with a substantial drop in revenues and some minor tweaks to earnings numbers.

Check out our latest analysis for Bâloise Holding

The average price target was steady at CHF169 even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Bâloise Holding at CHF189 per share, while the most bearish prices it at CHF135. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Bâloise Holding shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 18% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 0.6% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 0.2% per year. So it's pretty clear that Bâloise Holding's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Unfortunately they also cut their revenue estimates for this year, and they expect sales to lag the wider market. That said, earnings per share are more important for creating value for shareholders. Given the stark change in sentiment, we'd understand if investors became more cautious on Bâloise Holding after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Bâloise Holding analysts - going out to 2022, 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. 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.
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