Downgrade: Here's How This Analyst Sees Esautomotion S.p.A. (BIT:ESAU) Performing In The Near Term

Market forces rained on the parade of Esautomotion S.p.A. (BIT:ESAU) shareholders today, when the covering analyst downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

Following the latest downgrade, Esautomotion's lone analyst currently expects revenues in 2024 to be €36m, approximately in line with the last 12 months. Statutory earnings per share are supposed to decrease 2.5% to €0.36 in the same period. Previously, the analyst had been modelling revenues of €44m and earnings per share (EPS) of €0.60 in 2024. Indeed, we can see that the analyst is a lot more bearish about Esautomotion's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Esautomotion

The consensus price target fell 11% to €7.24, with the weaker earnings outlook clearly leading analyst valuation estimates.

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 Esautomotion's revenue growth is expected to slow, with the forecast 1.5% annualised growth rate until the end of 2024 being well below the historical 18% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.8% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Esautomotion.

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. 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 Esautomotion.

As you can see, the covering analyst clearly isn't bullish, and there might be good reason for that. We've identified some potential issues with Esautomotion's financials, such as concerns around earnings quality. For more information, you can click here to discover this and the 1 other flag we've identified.

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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.