Bearish: Analysts Just Cut Their ELES Semiconductor Equipment S.p.A. (BIT:ELES) Revenue and EPS estimates

Today is shaping up negative for ELES Semiconductor Equipment S.p.A. (BIT:ELES) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the most recent consensus for ELES Semiconductor Equipment from its twin analysts is for revenues of €21m in 2021 which, if met, would be a decent 8.7% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to crater 48% to €0.092 in the same period. Prior to this update, the analysts had been forecasting revenues of €24m and earnings per share (EPS) of €0.11 in 2021. Indeed, we can see that the analysts are a lot more bearish about ELES Semiconductor Equipment's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for ELES Semiconductor Equipment

The consensus price target fell 6.6% to €4.98, with the weaker earnings outlook clearly leading analyst valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic ELES Semiconductor Equipment analyst has a price target of €5.35 per share, while the most pessimistic values it at €4.60. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

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 can infer from the latest estimates that forecasts expect a continuation of ELES Semiconductor Equipment'shistorical trends, as the 18% annualised revenue growth to the end of 2021 is roughly in line with the 17% annual revenue growth over the past year. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 11% annually. So although ELES Semiconductor Equipment is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better 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 ELES Semiconductor Equipment.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.