Newsflash: Fuller, Smith & Turner P.L.C. (LON:FSTA) Analysts Have Been Trimming Their Revenue Forecasts

The analysts covering Fuller, Smith & Turner P.L.C. (LON:FSTA) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the consensus from Fuller Smith & Turner's five analysts is for revenues of UK£185m in 2021, which would reflect a concerning 44% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of UK£205m in 2021. The forecasts seem less optimistic overall, with the modest decline in revenue estimates in the latest consensus update.

Check out our latest analysis for Fuller Smith & Turner

We'd point out that there was no major changes to their price target of UK£8.54, suggesting the latest estimates were not enough to shift their view on the value of the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Fuller Smith & Turner at UK£13.50 per share, while the most bearish prices it at UK£6.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. Over the past five years, revenues have declined around 1.9% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for a 44% decline in revenue next year. Compare this against analyst estimates for companies in the wider industry, which suggest that revenues (in aggregate) are expected to grow 11% next year. So while a broad number of companies are forecast to grow, unfortunately Fuller Smith & Turner is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Fuller Smith & Turner going forwards.

Still got questions? We have estimates for Fuller Smith & Turner from its five analysts out until 2024, 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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