One Analyst Just Shaved Their PharmaSGP Holding SE (ETR:PSG) Forecasts Dramatically

One thing we could say about the covering analyst on PharmaSGP Holding SE (ETR:PSG) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following the downgrade, the consensus from lone analyst covering PharmaSGP Holding is for revenues of €58m in 2021, implying a definite 11% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to plummet 24% to €1.03 in the same period. Prior to this update, the analyst had been forecasting revenues of €71m and earnings per share (EPS) of €1.46 in 2021. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for PharmaSGP Holding

It'll come as no surprise then, to learn that the analyst has cut their price target 13% to €32.50.

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. We would highlight that sales are expected to reverse, with the forecast 11% revenue decline a notable change from historical growth of 7.3% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.6% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - PharmaSGP Holding is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for PharmaSGP Holding. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of PharmaSGP Holding.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for PharmaSGP Holding going out as far as 2023, 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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