This Broker Just Slashed Their TraWell Co S.p.A. (BIT:TWL) Earnings Forecasts

The latest analyst coverage could presage a bad day for TraWell Co S.p.A. (BIT:TWL), with the covering analyst 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 analyst seeing grey clouds on the horizon.

Following the downgrade, the consensus from sole analyst covering TraWell Co is for revenues of €22m in 2022, implying a noticeable 6.1% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to plummet 39% to €0.16 in the same period. Previously, the analyst had been modelling revenues of €26m and earnings per share (EPS) of €0.36 in 2022. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

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What's most unexpected is that the consensus price target rose 25% to €9.10, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

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 also point out that the forecast 6.1% annualised revenue decline to the end of 2022 is better than the historical trend, which saw revenues shrink 12% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 6.4% annually. So it's pretty clear that, while it does have declining revenues, the analyst also expect TraWell Co to suffer worse than the wider 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 TraWell Co. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The rising price target is a puzzle, but still - with a serious cut to this year's outlook, we wouldn't be surprised if investors were a bit wary of TraWell Co.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for TraWell Co going out as far as 2024, and you can see them 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.