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

The analysts covering ALSO Holding AG (VTX:ALSN) 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 this downgrade, ALSO Holding's five analysts are forecasting 2023 revenues to be €11b, approximately in line with the last 12 months. Per-share earnings are expected to rise 8.1% to €12.22. Prior to this update, the analysts had been forecasting revenues of €12b and earnings per share (EPS) of €12.30 in 2023. So it looks like the analysts have become a bit less optimistic after the latest consensus updates announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

See our latest analysis for ALSO Holding

The consensus has reconfirmed its price target of €281, showing that the analysts don't expect weaker sales expectationsthis year to have a material impact on ALSO Holding's market value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on ALSO Holding, with the most bullish analyst valuing it at €301 and the most bearish at €218 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 0.8% by the end of 2023. This indicates a significant reduction from annual growth of 4.7% 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 7.2% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - ALSO Holding is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that ALSO Holding's revenues are expected to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on ALSO Holding after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple ALSO Holding analysts - going out to 2025, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.