What You Need To Know About The IOG plc (LON:IOG) Analyst Downgrade Today

The latest analyst coverage could presage a bad day for IOG plc (LON:IOG), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the consensus from three analysts covering IOG is for revenues of UK£65m in 2023, implying a considerable 14% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing UK£85m of revenue in 2023. It looks like forecasts have become a fair bit less optimistic on IOG, given the sizeable cut to revenue estimates.

See our latest analysis for IOG

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 14% by the end of 2023. This indicates a significant reduction from annual growth of 99% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 2.7% per year. The forecasts do look bearish for IOG, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. The analysts also expect revenues to shrink faster than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on IOG after today.

Unsatisfied? At least one of IOG's three analysts has provided estimates out to 2025, which can be seen for 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.