Downgrade: Here's How This Analyst Sees eQ Oyj (HEL:EQV1V) Performing In The Near Term

The analyst covering eQ Oyj (HEL:EQV1V) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

After the downgrade, the solo analyst covering eQ Oyj is now predicting revenues of €80m in 2024. If met, this would reflect a solid 20% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 28% to €0.90. Previously, the analyst had been modelling revenues of €89m and earnings per share (EPS) of €1.03 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a real cut to earnings per share numbers as well.

See our latest analysis for eQ Oyj

It'll come as no surprise then, to learn that the analyst has cut their price target 11% to €16.00.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analyst is definitely expecting eQ Oyj's growth to accelerate, with the forecast 16% annualised growth to the end of 2024 ranking favourably alongside historical growth of 12% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that eQ Oyj is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of eQ Oyj.

Worse yet, our risk analysis suggests that eQ Oyj may find it hard to maintain its dividend following these downgrades. For more information, you can click here to learn more about our dividend analysis and the 1 potential flag we've identified.

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.