Need To Know: This Analyst Just Made A Substantial Cut To Their Harmony Energy Income Trust Plc (LON:HEIT) Estimates

One thing we could say about the covering analyst on Harmony Energy Income Trust Plc (LON:HEIT) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

After this downgrade, Harmony Energy Income Trust's single analyst is now forecasting revenues of UK£54m in 2023. This would be a credible 2.6% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to increase 2.1% to UK£0.22. Before this latest update, the analyst had been forecasting revenues of UK£71m and earnings per share (EPS) of UK£0.26 in 2023. Indeed, we can see that the analyst is a lot more bearish about Harmony Energy Income Trust's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Harmony Energy Income Trust

The analyst made no major changes to their price target of UK£1.38, suggesting the downgrades are not expected to have a long-term impact on Harmony Energy Income Trust's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Harmony Energy Income Trust, with the most bullish analyst valuing it at UK£1.41 and the most bearish at UK£1.35 per share. Still, with such a tight range of estimates, it suggests the analyst has a pretty good idea of what they think the company is worth.

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 Harmony Energy Income Trust. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Harmony Energy Income Trust after the downgrade.

That said, this broker might have good reason to be negative on Harmony Energy Income Trust, given concerns around earnings quality. For more information, you can click here to discover this and the 1 other concern we've identified.

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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