What Does The Future Hold For Energiekontor AG (ETR:EKT)? These Analysts Have Been Cutting Their Estimates

Today is shaping up negative for Energiekontor AG (ETR:EKT) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. At €66.40, shares are up 8.3% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the downgrade, the latest consensus from Energiekontor's three analysts is for revenues of €245m in 2023, which would reflect a huge 45% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to climb 20% to €3.35. Previously, the analysts had been modelling revenues of €380m and earnings per share (EPS) of €3.68 in 2023. It looks like analyst sentiment has fallen somewhat in this update, with a pretty serious reduction to revenue estimates and a small dip in earnings per share numbers as well.

See our latest analysis for Energiekontor

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Energiekontor's past performance and to peers in the same industry. For example, we noticed that Energiekontor's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 45% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 1.5% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.5% annually. So it looks like Energiekontor is expected to grow faster than its competitors, at least for a while.

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 Energiekontor. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better 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 Energiekontor after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Energiekontor analysts - going out to 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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