The Rémy Cointreau SA (EPA:RCO) Analysts Have Been Trimming Their Sales Forecasts

Today is shaping up negative for Rémy Cointreau SA (EPA:RCO) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the consensus from Rémy Cointreau's 19 analysts is for revenues of €1.2b in 2024, which would reflect a sizeable 21% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to nosedive 23% to €4.45 in the same period. Before this latest update, the analysts had been forecasting revenues of €1.4b and earnings per share (EPS) of €4.94 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a small dip in earnings per share numbers as well.

View our latest analysis for Rémy Cointreau

It'll come as no surprise then, to learn that the analysts have cut their price target 8.7% to €137.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 27% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 7.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Rémy Cointreau is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Rémy Cointreau's revenues are expected to grow slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Rémy Cointreau's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Rémy Cointreau after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Rémy Cointreau analysts - 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.