Newsflash: Deutsche Beteiligungs AG (ETR:DBAN) Analysts Have Been Trimming Their Revenue Forecasts

Today is shaping up negative for Deutsche Beteiligungs AG (ETR:DBAN) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the consensus from Deutsche Beteiligungs' four analysts is for revenues of €49m in 2022, which would reflect a concerning 74% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to dive 92% to €0.65 in the same period. Before this latest update, the analysts had been forecasting revenues of €111m and earnings per share (EPS) of €2.05 in 2022. Indeed, we can see that the analysts are a lot more bearish about Deutsche Beteiligungs' prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Deutsche Beteiligungs

Despite the cuts to forecast earnings, there was no real change to the €46.53 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic 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. Currently, the most bullish analyst values Deutsche Beteiligungs at €55.00 per share, while the most bearish prices it at €38.00. 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 Deutsche Beteiligungs shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 74% by the end of 2022. This indicates a significant reduction from annual growth of 13% 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 2.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Deutsche Beteiligungs 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 Deutsche Beteiligungs. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Deutsche Beteiligungs going forwards.

That said, the analysts might have good reason to be negative on Deutsche Beteiligungs, given dilutive stock issuance over the past year. For more information, you can click here to discover this and the 3 other risks we've identified.

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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.