These Analysts Just Made A Massive Downgrade To Their Petards Group plc (LON:PEG) EPS Forecasts

The latest analyst coverage could presage a bad day for Petards Group plc (LON:PEG), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following this downgrade, Petards Group's two analysts are forecasting 2022 revenues to be UK£11m, approximately in line with the last 12 months. Statutory earnings per share are supposed to dive 70% to UK£0.0028 in the same period. Before this latest update, the analysts had been forecasting revenues of UK£14m and earnings per share (EPS) of UK£0.01 in 2022. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Petards Group

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 0.03% annualised revenue decline to the end of 2022 is better than the historical trend, which saw revenues shrink 7.3% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 9.5% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Petards Group to suffer worse than 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Petards Group, and a few readers might choose to steer clear of the stock.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2023, which can be seen for 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.