Cherry AG (ETR:C3RY) Analysts Just Slashed This Year's Estimates

Market forces rained on the parade of Cherry AG (ETR:C3RY) shareholders today, when the analysts downgraded their forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Investors however, have been notably more optimistic about Cherry recently, with the stock price up a notable 24% to €6.80 in the past week. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.

Following the latest downgrade, the current consensus, from the three analysts covering Cherry, is for revenues of €132m in 2022, which would reflect a perceptible 7.6% reduction in Cherry's sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of €148m in 2022. The consensus view seems to have become more pessimistic on Cherry, noting the measurable cut to revenue estimates in this update.

Check out our latest analysis for Cherry

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 15% by the end of 2022. This indicates a significant reduction from annual growth of 1.1% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Cherry is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Cherry, and we wouldn't blame shareholders for feeling a little more cautious themselves.

Unsatisfied? We have estimates for Cherry from its three analysts out until 2024, and you can see them free 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.