Bearish: Analysts Just Cut Their Tristel plc (LON:TSTL) Revenue and EPS estimates

Today is shaping up negative for Tristel plc (LON:TSTL) 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 latest downgrade, the current consensus, from the two analysts covering Tristel, is for revenues of UK£28m in 2022, which would reflect a small 5.1% reduction in Tristel's sales over the past 12 months. Statutory earnings per share are anticipated to crater 93% to UK£0.0035 in the same period. Before this latest update, the analysts had been forecasting revenues of UK£35m and earnings per share (EPS) of UK£0.091 in 2022. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for Tristel

It'll come as no surprise then, to learn that the analysts have cut their price target 23% to UK£4.43. 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. The most optimistic Tristel analyst has a price target of UK£4.80 per share, while the most pessimistic values it at UK£4.05. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

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 5.1% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Tristel is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Tristel's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Tristel.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Tristel going out as far as 2024, 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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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.