Analyst Forecasts Just Got A Lot More Bearish On Basler Aktiengesellschaft (ETR:BSL)

Market forces rained on the parade of Basler Aktiengesellschaft (ETR:BSL) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the latest downgrade, the six analysts covering Basler provided consensus estimates of €223m revenue in 2023, which would reflect a considerable 15% decline on its sales over the past 12 months. After this downgrade, the company is anticipated to report a loss of €0.31 in 2023, a sharp decline from a profit over the last year. Prior to this update, the analysts had been forecasting revenues of €254m and earnings per share (EPS) of €0.40 in 2023. So we can see that the consensus has become notably more bearish on Basler's outlook with these numbers, making a substantial drop in this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

Check out our latest analysis for Basler

The consensus price target fell 19% to €21.72, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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. There are some variant perceptions on Basler, with the most bullish analyst valuing it at €33.00 and the most bearish at €14.10 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Basler's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 15% by the end of 2023. This indicates a significant reduction from annual growth of 13% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Basler is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts are expecting Basler to become unprofitable this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Basler's revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Basler 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.