One Analyst Just Shaved Their Best of the Best PLC (LON:BOTB) Forecasts Dramatically

The latest analyst coverage could presage a bad day for Best of the Best PLC (LON:BOTB), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the current consensus, from the solo analyst covering Best of the Best, is for revenues of UK£40m in 2022, which would reflect an uncomfortable 12% reduction in Best of the Best's sales over the past 12 months. Statutory earnings per share are anticipated to tumble 56% to UK£0.53 in the same period. Before this latest update, the analyst had been forecasting revenues of UK£54m and earnings per share (EPS) of UK£1.42 in 2022. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a large cut to earnings per share numbers as well.

See our latest analysis for Best of the Best

The consensus price target fell 55% to UK£14.00, with the weaker earnings outlook clearly leading analyst valuation estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 12% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 30% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 15% annually for the foreseeable future. It's pretty clear that Best of the Best's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Best of the Best. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Best of the Best.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Best of the Best going out as far as 2023, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.
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