Newsflash: AXA SA (EPA:CS) Analysts Have Been Trimming Their Revenue Forecasts

One thing we could say about the analysts on AXA SA (EPA:CS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the consensus from nine analysts covering AXA is for revenues of €74b in 2023, implying a substantial 27% decline in sales compared to the last 12 months. Per-share earnings are expected to ascend 16% to €3.37. Before this latest update, the analysts had been forecasting revenues of €104b and earnings per share (EPS) of €3.45 in 2023. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a sizeable cut to revenue estimates and a minor downgrade to EPS estimates to boot.

View our latest analysis for AXA

Analysts made no major changes to their price target of €33.39, suggesting the downgrades are not expected to have a long-term impact on AXA's valuation.

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. One more thing stood out to us about these estimates, and it's the idea that AXA's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 47% to the end of 2023. This tops off a historical decline of 2.7% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 8.3% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect AXA to suffer worse than 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on AXA 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 AXA analysts - going out to 2025, 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.