News Flash: 4 Analysts Think LEM Holding SA (VTX:LEHN) Earnings Are Under Threat

The latest analyst coverage could presage a bad day for LEM Holding SA (VTX:LEHN), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the four analysts covering LEM Holding provided consensus estimates of CHF341m revenue in 2025, which would reflect a chunky 9.0% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to dive 22% to CHF33.84 in the same period. Prior to this update, the analysts had been forecasting revenues of CHF404m and earnings per share (EPS) of CHF57.68 in 2025. Indeed, we can see that the analysts are a lot more bearish about LEM Holding's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for LEM Holding

Analysts made no major changes to their price target of CHF1,793, suggesting the downgrades are not expected to have a long-term impact on LEM Holding's valuation.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 12% by the end of 2025. This indicates a significant reduction from annual growth of 7.8% 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 9.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - LEM Holding is expected to lag 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 LEM Holding. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of LEM Holding.

Worse, LEM Holding is labouring under a substantial debt burden, which - if today's forecasts prove accurate - the forecast downgrade could potentially exacerbate. See why we're concerned about LEM Holding's balance sheet by visiting our risks dashboard for free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months 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.

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