Need To Know: This Analyst Just Made A Substantial Cut To Their Energy S.p.A. (BIT:ENY) Estimates

One thing we could say about the covering analyst on Energy S.p.A. (BIT:ENY) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

Following the downgrade, the consensus from one analyst covering Energy is for revenues of €85m in 2023, implying a stressful 33% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to nosedive 54% to €0.17 in the same period. Prior to this update, the analyst had been forecasting revenues of €129m and earnings per share (EPS) of €0.24 in 2023. Indeed, we can see that the analyst is a lot more bearish about Energy's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Energy

It'll come as no surprise then, to learn that the analyst has cut their price target 33% to €2.00.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 33% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 46% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Energy is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Energy's revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2025, 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.

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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.