The CeoTronics AG (FRA:CEK) Analyst Just Cut Their Revenue Forecast By 13%

One thing we could say about the covering analyst on CeoTronics AG (FRA:CEK) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. At €3.71, shares are up 7.5% in the past 7 days. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the latest downgrade, CeoTronics' single analyst currently expects revenues in 2024 to be €30m, approximately in line with the last 12 months. Statutory earnings per share are presumed to accumulate 4.4% to €0.40. Before this latest update, the analyst had been forecasting revenues of €35m and earnings per share (EPS) of €0.41 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a minor downgrade to EPS estimates to boot.

View our latest analysis for CeoTronics

Despite the cuts to forecast earnings, there was no real change to the €6.45 price target, showing that the analyst don't think the changes have a meaningful impact on its intrinsic value.

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. It's pretty clear that there is an expectation that CeoTronics' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.7% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 1.6% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than CeoTronics.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that CeoTronics' revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of CeoTronics going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for CeoTronics going out as far as 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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