One Analyst Just Shaved Their Kesla Oyj (HEL:KELAS) Forecasts Dramatically

The analyst covering Kesla Oyj (HEL:KELAS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

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Following the latest downgrade, the current consensus, from the one analyst covering Kesla Oyj, is for revenues of €36m in 2025, which would reflect a considerable 11% reduction in Kesla Oyj's sales over the past 12 months. Per-share losses are expected to explode, reaching €0.93 per share. Yet prior to the latest estimates, the analyst had been forecasting revenues of €40m and losses of €0.33 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for Kesla Oyj

The consensus price target fell 21% to €2.20, implicitly signalling that lower earnings per share are a leading indicator for Kesla Oyj's valuation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 21% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 2.7% 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 5.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Kesla Oyj is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analyst increased their loss per share estimates for this year. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Kesla 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 Kesla Oyj.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.

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 with high insider ownership.

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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.