One Montagne et Neige Développement SA (EPA:ALMND) Analyst Just Slashed Their Estimates By A Notable 13%

The analyst covering Montagne et Neige Développement SA (EPA:ALMND) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Surprisingly the share price has been buoyant, rising 17% to €5.34 in the past 7 days. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

After the downgrade, the lone analyst covering Montagne et Neige Développement is now predicting revenues of €70m in 2022. If met, this would reflect a major 71% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 73% to €2.03. Yet prior to the latest estimates, the analyst had been forecasting revenues of €80m and losses of €1.96 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for Montagne et Neige Développement

The consensus price target fell 43% to €4.00, implicitly signalling that lower earnings per share are a leading indicator for Montagne et Neige Développement's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Montagne et Neige Développement's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 71% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 14% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 11% per year. So it looks like Montagne et Neige Développement is expected to grow faster than its competitors, at least for a while.

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 Montagne et Neige Développement. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The consensus price target fell measurably, with the analyst seemingly not reassured by recent business developments, leading to a lower estimate of Montagne et Neige Développement's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Montagne et Neige Développement going forwards.

That said, this analyst might have good reason to be negative on Montagne et Neige Développement, given dilutive stock issuance over the past year. Learn more, and discover the 4 other flags we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks 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.