Analysts Have Just Cut Their RWE Aktiengesellschaft (ETR:RWE) Revenue Estimates By 11%

The latest analyst coverage could presage a bad day for RWE Aktiengesellschaft (ETR:RWE), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. 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 15 analysts covering RWE is for revenues of €27b in 2024, implying a concerning 22% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing €30b of revenue in 2024. It looks like forecasts have become a fair bit less optimistic on RWE, given the substantial drop in revenue estimates.

View our latest analysis for RWE

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 22% by the end of 2024. This indicates a significant reduction from annual growth of 28% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - RWE is expected to lag the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for RWE this year. They also expect company revenue to perform worse than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of RWE going forwards.

There might be good reason for analyst bearishness towards RWE, like concerns around earnings quality. For more information, you can click here to discover this and the 2 other risks we've identified.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.