Lloyd Fonds AG (ETR:L1OA) Analysts Just Trimmed Their Revenue Forecasts By 19%

The latest analyst coverage could presage a bad day for Lloyd Fonds AG (ETR:L1OA), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After this downgrade, Lloyd Fonds' three analysts are now forecasting revenues of €35m in 2022. This would be a huge 36% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to tumble 74% to €0.10 in the same period. Prior to this update, the analysts had been forecasting revenues of €44m and earnings per share (EPS) of €0.10 in 2022. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a substantial drop in revenues and reconfirming their earnings per share estimates.

Check out our latest analysis for Lloyd Fonds

It will come as no surprise then, that the consensus price target fell 5.0% to €16.30 following these changes. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Lloyd Fonds analyst has a price target of €18.00 per share, while the most pessimistic values it at €13.90. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 36% growth on an annualised basis. That is in line with its 37% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.3% per year. So it's pretty clear that Lloyd Fonds is forecast to grow substantially faster than its 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. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Lloyd Fonds going forwards.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Lloyd Fonds analysts - going out to 2024, 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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