This Analyst Just Downgraded Their Laboratorio Reig Jofre, S.A. (BME:RJF) EPS Forecasts

The analyst covering Laboratorio Reig Jofre, S.A. (BME:RJF) 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) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the most recent consensus for Laboratorio Reig Jofre from its single analyst is for revenues of €261m in 2022 which, if met, would be a meaningful 8.8% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 36% to €0.09. Before this latest update, the analyst had been forecasting revenues of €290m and earnings per share (EPS) of €0.16 in 2022. The forecasts seem less optimistic after the new consensus numbers, with lower sales estimates and making a large cut to earnings per share forecasts.

Check out our latest analysis for Laboratorio Reig Jofre

It'll come as no surprise then, to learn that the analyst has cut their price target 23% to €4.10.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2022 brings more of the same, according to the analyst, with revenue forecast to display 8.8% growth on an annualised basis. That is in line with its 9.1% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.5% per year. So although Laboratorio Reig Jofre is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Laboratorio Reig Jofre. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Laboratorio Reig Jofre.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Laboratorio Reig Jofre going out as far as 2024, 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.

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.