The Consensus EPS Estimates For The Pebble Group plc (LON:PEBB) Just Fell Dramatically

One thing we could say about the analysts on The Pebble Group plc (LON:PEBB) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After the downgrade, the consensus from Pebble Group's four analysts is for revenues of UK£124m in 2023, which would reflect a definite 9.5% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to crater 31% to UK£0.032 in the same period. Before this latest update, the analysts had been forecasting revenues of UK£140m and earnings per share (EPS) of UK£0.044 in 2023. 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.

View our latest analysis for Pebble Group

The consensus price target fell 16% to UK£1.35, with the weaker earnings outlook clearly leading analyst valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 9.5% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 18% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Pebble Group 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 Pebble Group. 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 Pebble Group.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Pebble Group analysts - going out to 2025, 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.