What You Need To Know About The Eurazeo SE (EPA:RF) Analyst Downgrade Today

Today is shaping up negative for Eurazeo SE (EPA:RF) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Shares are up 4.6% to €73.25 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the downgrade, the most recent consensus for Eurazeo from its three analysts is for revenues of €733m in 2024 which, if met, would be a substantial 117% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of €821m in 2024. The consensus view seems to have become more pessimistic on Eurazeo, noting the substantial drop in revenue estimates in this update.

See our latest analysis for Eurazeo

We'd point out that there was no major changes to their price target of €92.00, suggesting the latest estimates were not enough to shift their view on the value of the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Eurazeo's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 4x growth to the end of 2024 on an annualised basis. That is well above its historical decline of 17% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 22% annually. So it looks like Eurazeo is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Eurazeo this year. They're also forecasting more rapid revenue growth than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Eurazeo going forwards.

Not only have the analysts been downgrading the stock, but it looks like Eurazeo might find it hard to maintain its dividends, if these forecasts prove accurate. For more information, you can click here to learn more about our dividend analysis and the 1 potential flag we've identified.

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 with high insider ownership.

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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.