One Aeffe S.p.A. (BIT:AEF) Analyst Just Cut Their EPS Forecasts

The latest analyst coverage could presage a bad day for Aeffe S.p.A. (BIT:AEF), with the covering analyst 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 analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the consensus from Aeffe's one analyst is for revenues of €282m in 2024, which would reflect a considerable 10% decline in sales compared to the last year of performance. Losses are predicted to fall substantially, shrinking 40% to €0.23 per share. Yet prior to the latest estimates, the analyst had been forecasting revenues of €320m and losses of €0.16 per share in 2024. Ergo, there's been a clear change in sentiment, with the analyst administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

Check out our latest analysis for Aeffe

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 10% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 0.2% 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 8.3% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Aeffe is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analyst increased their loss per share estimates for this year. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Aeffe's revenues are expected to grow slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like the analyst has become a lot more bearish on Aeffe, and their negativity could be grounds for caution.

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. See why we're concerned about Aeffe's balance sheet by visiting our risks dashboard for free on our platform here.

We also provide an overview of the Aeffe Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.