One Apetit Oyj (HEL:APETIT) Analyst Just Made A Major Cut To Next Year's Estimates

One thing we could say about the covering analyst on Apetit Oyj (HEL:APETIT) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business. Shares are up 4.5% to €12.80 in the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the latest downgrade, the current consensus, from the solitary analyst covering Apetit Oyj, is for revenues of €152m in 2022, which would reflect a disturbing 46% reduction in Apetit Oyj's sales over the past 12 months. Per-share earnings are expected to soar 69% to €0.65. Prior to this update, the analyst had been forecasting revenues of €243m and earnings per share (EPS) of €0.77 in 2022. Indeed, we can see that the analyst is a lot more bearish about Apetit Oyj's prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Apetit Oyj

The average price target climbed 13% to €13.50 despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Apetit Oyj's past performance and to peers in the same industry. One more thing stood out to us about these estimates, and it's the idea that Apetit Oyj's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 46% to the end of 2022. This tops off a historical decline of 1.2% a year 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 revenue grow 4.7% per year. So it's pretty clear that, while it does have declining revenues, the analyst also expect Apetit Oyj to suffer worse 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 Apetit Oyj. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The rising price target is a puzzle, but still - with a serious cut to this year's outlook, we wouldn't be surprised if investors were a bit wary of Apetit Oyj.

That said, the covering analyst might have good reason to be negative on Apetit Oyj, given the risk of cutting its dividend. For more information, you can click here to discover this and the 1 other risk 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.