This Equita Group S.p.A. (BIT:EQUI) Analyst Is Way More Bearish Than They Used To Be

Today is shaping up negative for Equita Group S.p.A. (BIT:EQUI) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

Following the latest downgrade, Equita Group's solo analyst currently expects revenues in 2023 to be €93m, approximately in line with the last 12 months. Per-share earnings are expected to shoot up 23% to €0.40. Before this latest update, the analyst had been forecasting revenues of €105m and earnings per share (EPS) of €0.50 in 2023. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a considerable drop in earnings per share numbers as well.

See our latest analysis for Equita Group

Despite the cuts to forecast earnings, there was no real change to the €4.60 price target, showing that the analyst don't think the changes have a meaningful impact on its intrinsic value.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 0.4% by the end of 2023. This indicates a significant reduction from annual growth of 12% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 1.5% per year. The forecasts do look comparatively optimistic for Equita Group, since they're expecting it to shrink slower than the industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Equita Group. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Equita Group.

Worse yet, our risk analysis suggests that Equita Group may find it hard to maintain its dividend following these downgrades. What makes us say that? Learn more by visiting our risks dashboard 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.