One Delticom AG (ETR:DEX) Analyst Is Reducing Their Forecasts For This Year

The latest analyst coverage could presage a bad day for Delticom AG (ETR:DEX), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

Following the latest downgrade, the current consensus, from the solo analyst covering Delticom, is for revenues of €490m in 2022, which would reflect a substantial 20% reduction in Delticom's sales over the past 12 months. Statutory earnings per share are anticipated to plummet 78% to €0.10 in the same period. Prior to this update, the analyst had been forecasting revenues of €611m and earnings per share (EPS) of €0.48 in 2022. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Delticom

It'll come as no surprise then, to learn that the analyst has cut their price target 47% to €8.50.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. Over the past five years, revenues have declined around 2.7% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 20% decline in revenue until the end of 2022. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 19% per year. So it's pretty clear that, while it does have declining revenues, the analyst also expect Delticom to suffer worse than 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 Delticom. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Delticom's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Delticom.

A high debt burden combined with a downgrade of this magnitude always gives us some reason for concern, especially if these forecasts are just the first sign of a business downturn. To see more of our financial analysis, you can click through to our free platform to learn more about its balance sheet and specific concerns we've identified.

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.