Time To Worry? Analysts Are Downgrading Their Tubacex, S.A. (BME:TUB) Outlook

The analysts covering Tubacex, S.A. (BME:TUB) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After the downgrade, the three analysts covering Tubacex are now predicting revenues of €431m in 2021. If met, this would reflect a substantial 20% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 39% to €0.20. Yet before this consensus update, the analysts had been forecasting revenues of €491m and losses of €0.13 per share in 2021. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Tubacex

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Tubacex's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 44% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 0.1% a year over the past five years. What's also interesting is that our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue decline 1.9% annually for the foreseeable future. So it's pretty clear that Tubacex is expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Tubacex, and their negativity could be grounds for caution.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Tubacex analysts - going out to 2023, 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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