One Analyst Just Downgraded Their EuropaCorp (EPA:ALECP) Outlook

Market forces rained on the parade of EuropaCorp (EPA:ALECP) shareholders today, when the covering analyst downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following this downgrade, EuropaCorp's solitary analyst are forecasting 2025 revenues to be €33m, approximately in line with the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 70% to €0.01. Previously, the analyst had been modelling revenues of €37m and earnings per share (EPS) of €0.023 in 2025. So we can see that the consensus has become notably more bearish on EuropaCorp's outlook with these numbers, making a substantial drop in this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

Check out our latest analysis for EuropaCorp

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. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2025 compared to the historical decline of 21% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 8.1% per year. So it's pretty clear that, while it does have declining revenues, the analyst also expect EuropaCorp to suffer worse than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for EuropaCorp dropped from profits to a loss this year. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that EuropaCorp's revenues are expected to grow slower than the wider market. After a cut like that, investors could be forgiven for thinking the analyst is a lot more bearish on EuropaCorp, and a few readers might choose to steer clear of the stock.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2026, which can be seen for 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 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.