Time To Worry? Analysts Just Downgraded Their La Française de l'Energie S.A. (EPA:FDE) Outlook

The latest analyst coverage could presage a bad day for La Française de l'Energie S.A. (EPA:FDE), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the current consensus from La Française de l'Energie's three analysts is for revenues of €47m in 2024 which - if met - would reflect a huge 20% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 39% to €3.23. Before this latest update, the analysts had been forecasting revenues of €53m and earnings per share (EPS) of €3.44 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a small dip in EPS estimates to boot.

View our latest analysis for La Française de l'Energie

Despite the cuts to forecast earnings, there was no real change to the €64.67 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the La Française de l'Energie's past performance and to peers in the same 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 16% growth on an annualised basis. This is compared to a historical growth rate of 42% over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 1.9% 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. Given the stark change in sentiment, we'd understand if investors became more cautious on La Française de l'Energie after today.

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.