News Flash: 3 Analysts Think Figeac Aero Société Anonyme (EPA:FGA) Earnings Are Under Threat

One thing we could say about the analysts on Figeac Aero Société Anonyme (EPA:FGA) - 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) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. Shares are up 9.2% to €4.32 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the downgrade, the consensus from three analysts covering Figeac Aero Société Anonyme is for revenues of €235m in 2021, implying a sizeable 26% decline in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 27% to €1.28. Yet before this consensus update, the analysts had been forecasting revenues of €301m and losses of €0.80 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for Figeac Aero Société Anonyme

Analysts lifted their price target 14% to €4.83, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Figeac Aero Société Anonyme at €6.00 per share, while the most bearish prices it at €3.70. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Figeac Aero Société Anonyme shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with the forecast 26% revenue decline a notable change from historical growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 8.1% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Figeac Aero Société Anonyme is expected to lag the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Figeac Aero Société Anonyme. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The increasing price target is not intuitively what we would expect to see, given these downgrades, and we'd suggest shareholders revisit their investment thesis before making a decision.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Figeac Aero Société Anonyme going out to 2023, and you can see them free on our platform here.

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