What You Need To Know About The Workspace Group plc (LON:WKP) Analyst Downgrade Today

Market forces rained on the parade of Workspace Group plc (LON:WKP) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the consensus from five analysts covering Workspace Group is for revenues of UK£96m in 2022, implying a disturbing 25% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing UK£118m of revenue in 2022. The consensus view seems to have become more pessimistic on Workspace Group, noting the measurable cut to revenue estimates in this update.

Check out our latest analysis for Workspace Group

We'd point out that there was no major changes to their price target of UK£9.12, suggesting the latest estimates were not enough to shift their view on the value of the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Workspace Group analyst has a price target of UK£10.50 per share, while the most pessimistic values it at UK£6.70. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 44% by the end of 2022. This indicates a significant reduction from annual growth of 6.3% 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 6.7% annually for the foreseeable future. It's pretty clear that Workspace Group's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Workspace Group going forwards.

Looking to learn more? At least one of Workspace Group's five analysts has provided estimates out to 2024, 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.

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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