Global Fashion Group S.A. (ETR:GFG) Analysts Just Trimmed Their Revenue Forecasts By 22%

The analysts covering Global Fashion Group S.A. (ETR:GFG) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the consensus from three analysts covering Global Fashion Group is for revenues of €740m in 2024, implying an uncomfortable 12% decline in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 34% to €0.52. However, before this estimates update, the consensus had been expecting revenues of €949m and €0.48 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for Global Fashion Group

The consensus price target fell 28% to €0.35, implicitly signalling that lower earnings per share are a leading indicator for Global Fashion Group's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. Over the past five years, revenues have declined around 7.0% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 12% decline in revenue until the end of 2024. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.8% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Global Fashion Group to suffer worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Global Fashion Group. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower 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. 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 Global Fashion Group after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Global Fashion Group analysts - going out to 2026, 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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