Need To Know: Analysts Just Made A Substantial Cut To Their Abitare In S.p.A. (BIT:ABT) Estimates

The latest analyst coverage could presage a bad day for Abitare In S.p.A. (BIT:ABT), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from twin analysts covering Abitare In is for revenues of €131m in 2024, implying a concerning 43% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to dip 8.1% to €0.88 in the same period. Before this latest update, the analysts had been forecasting revenues of €160m and earnings per share (EPS) of €1.05 in 2024. Indeed, we can see that the analysts are a lot more bearish about Abitare In's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Abitare In

Despite the cuts to forecast earnings, there was no real change to the €7.60 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 43% by the end of 2024. This indicates a significant reduction from annual growth of 62% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.3% per year. It's pretty clear that Abitare In's revenues are expected to perform substantially worse than 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 Abitare In. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Abitare In's revenues are expected to grow slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Abitare In after the downgrade.

A high debt burden combined with a downgrade of this magnitude always gives us some reason for concern, especially if these forecasts are just the first sign of a business downturn. To see more of our financial analysis, you can click through to our free platform to learn more about its balance sheet and specific concerns we've identified.

You can also see our analysis of Abitare In's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.