Bearish: Analysts Just Cut Their Olympique Lyonnais Groupe SA (EPA:OLG) Revenue and EPS estimates

Today is shaping up negative for Olympique Lyonnais Groupe SA (EPA:OLG) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the current consensus from Olympique Lyonnais Groupe's two analysts is for revenues of €219m in 2021 which - if met - would reflect a major 79% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching €1.53 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of €248m and losses of €0.71 per share in 2021. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Olympique Lyonnais Groupe

The consensus price target was broadly unchanged at €2.20, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Olympique Lyonnais Groupe at €2.40 per share, while the most bearish prices it at €2.00. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Olympique Lyonnais Groupe's past performance and to peers in the same industry. The analysts are definitely expecting Olympique Lyonnais Groupe's growth to accelerate, with the forecast 79% growth ranking favourably alongside historical growth of 5.7% 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 grow their revenue at 5.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Olympique Lyonnais Groupe to grow faster than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Olympique Lyonnais Groupe. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Olympique Lyonnais Groupe.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Olympique Lyonnais Groupe going out as far as 2023, 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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