Things Look Grim For La Française de l'Energie S.A. (EPA:FDE) After Today's Downgrade

The analysts covering La Française de l'Energie S.A. (EPA:FDE) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the most recent consensus for La Française de l'Energie from its four analysts is for revenues of €38m in 2024 which, if met, would be a reasonable 6.9% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 38% to €2.07. Before this latest update, the analysts had been forecasting revenues of €48m and earnings per share (EPS) of €2.92 in 2024. Indeed, we can see that the analysts are a lot more bearish about La Française de l'Energie's prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for La Française de l'Energie

It'll come as no surprise then, to learn that the analysts have cut their price target 5.9% to €64.07.

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. It's pretty clear that there is an expectation that La Française de l'Energie's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.9% growth on an annualised basis. This is compared to a historical growth rate of 41% over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 0.8% annually. Factoring in the forecast slowdown in growth, it's pretty clear that La Française de l'Energie is still expected to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for La Française de l'Energie. Unfortunately, they also downgraded their revenue estimates, and our data indicates sales are expected to outperform the wider market. Even so, earnings per share are more important to the intrinsic value of the business. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of La Française de l'Energie.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for La Française de l'Energie going out to 2026, and you can see them 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.