SRV Yhtiöt Oyj (HEL:SRV1V) Analysts Just Slashed This Year's Estimates

The latest analyst coverage could presage a bad day for SRV Yhtiöt Oyj (HEL:SRV1V), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

After the downgrade, the consensus from SRV Yhtiöt Oyj's dual analysts is for revenues of €698m in 2025, which would reflect a measurable 6.4% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to dive 45% to €0.10 in the same period. Prior to this update, the analysts had been forecasting revenues of €780m and earnings per share (EPS) of €0.43 in 2025. Indeed, we can see that the analysts are a lot more bearish about SRV Yhtiöt Oyj's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for SRV Yhtiöt Oyj

Analysts made no major changes to their price target of €4.85, suggesting the downgrades are not expected to have a long-term impact on SRV Yhtiöt Oyj's valuation.

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. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2025 compared to the historical decline of 11% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 4.6% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect SRV Yhtiöt Oyj to suffer worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for SRV Yhtiöt Oyj. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on SRV Yhtiöt Oyj after the downgrade.

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.

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 backed by insiders.

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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.