Analysts Just Slashed Their Exel Composites Oyj (HEL:EXL1V) Earnings Forecasts

Market forces rained on the parade of Exel Composites Oyj (HEL:EXL1V) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the consensus from Exel Composites Oyj's two analysts is for revenues of €114m in 2023, which would reflect a discernible 4.4% decline in sales compared to the last year of performance. The loss per share is anticipated to greatly reduce in the near future, narrowing 69% to €0.12. Previously, the analysts had been modelling revenues of €126m and earnings per share (EPS) of €0.09 in 2023. There looks to have been a major change in sentiment regarding Exel Composites Oyj's prospects, with a measurable cut to revenues and the analysts now forecasting a loss instead of a profit.

View our latest analysis for Exel Composites Oyj

The consensus price target fell 20% to €3.50, implicitly signalling that lower earnings per share are a leading indicator for Exel Composites Oyj's valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 8.5% by the end of 2023. This indicates a significant reduction from annual growth of 8.5% 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 2.3% annually for the foreseeable future. It's pretty clear that Exel Composites Oyj's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Exel Composites Oyj dropped from profits to a loss this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Exel Composites Oyj's revenues are expected to grow slower 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 Exel Composites Oyj.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Exel Composites Oyj going out as far as 2025, 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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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.