Bearish: This Analyst Is Revising Their AST Groupe (EPA:ALAST) Revenue and EPS Prognostications

One thing we could say about the covering analyst on AST Groupe (EPA:ALAST) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

After the downgrade, the consensus from AST Groupe's lone analyst is for revenues of €152m in 2022, which would reflect a measurable 5.0% decline in sales compared to the last year of performance. Per-share earnings are expected to bounce 30% to €0.01. Prior to this update, the analyst had been forecasting revenues of €195m and earnings per share (EPS) of €0.33 in 2022. Indeed, we can see that the analyst is a lot more bearish about AST Groupe's prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for AST Groupe

It'll come as no surprise then, to learn that the analyst has cut their price target 29% to €5.00.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 5.0% by the end of 2022. This indicates a significant reduction from annual growth of 2.3% 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 6.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - AST Groupe is expected to lag the wider 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, and industry data suggests that AST Groupe's revenues are expected to grow slower 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 AST Groupe.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, 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 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.