Analyst Forecasts Just Became More Bearish On Azimut Holding S.p.A. (BIT:AZM)

The analysts covering Azimut Holding S.p.A. (BIT:AZM) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the consensus from seven analysts covering Azimut Holding is for revenues of €1.1b in 2022, implying a sizeable 24% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to nosedive 40% to €2.62 in the same period. Previously, the analysts had been modelling revenues of €1.3b and earnings per share (EPS) of €2.81 in 2022. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a small dip in earnings per share numbers as well.

Check out our latest analysis for Azimut Holding

The consensus price target fell 7.8% to €27.12, with the weaker earnings outlook clearly leading analyst valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Azimut Holding, with the most bullish analyst valuing it at €31.00 and the most bearish at €23.00 per share. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

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 24% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 11% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 1.9% per year. So it's pretty clear that Azimut Holding's revenues are expected to shrink faster 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 Azimut Holding. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that Azimut Holding revenue is expected to perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Azimut Holding's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Azimut Holding after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Azimut Holding going out to 2024, and you can see them 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.