These Analysts Just Made A Substantial Downgrade To Their Castings P.L.C. (LON:CGS) EPS Forecasts

The analysts covering Castings P.L.C. (LON:CGS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from dual analysts covering Castings is for revenues of UK£182m in 2025, implying a definite 19% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to crater 34% to UK£0.25 in the same period. Previously, the analysts had been modelling revenues of UK£216m and earnings per share (EPS) of UK£0.35 in 2025. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Castings

The consensus price target fell 18% to UK£4.50, with the weaker earnings outlook clearly leading analyst valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Castings' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 19% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 12% 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 1.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Castings is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Castings. 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 Castings.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Castings going out as far as 2027, 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 backed by insiders.

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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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