Some Global Fashion Group S.A. (ETR:GFG) Analysts Just Made A Major Cut To Next Year's Estimates

One thing we could say about the analysts on Global Fashion Group S.A. (ETR:GFG) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the latest downgrade, the current consensus, from the three analysts covering Global Fashion Group, is for revenues of €825m in 2023, which would reflect a not inconsiderable 18% reduction in Global Fashion Group's sales over the past 12 months. Losses are expected to be contained, narrowing 11% per share from last year to €0.67 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of €931m and losses of €0.59 per share in 2023. 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 lifted 25% to €1.40, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term.

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 three years, revenues have declined around 14% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 33% decline in revenue until the end of 2023. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 6.3% annually. So while a broad number of companies are forecast to grow, unfortunately Global Fashion Group is expected to see its sales affected worse than other companies in the 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. The rising price target is a puzzle, but still - with a serious cut to this year's outlook, we wouldn't be surprised if investors were a bit wary of Global Fashion Group.

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 Global Fashion Group analysts - going out to 2025, 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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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.