Need To Know: The Consensus Just Cut Its Ascopiave S.p.A. (BIT:ASC) Estimates For 2022

Market forces rained on the parade of Ascopiave S.p.A. (BIT:ASC) shareholders today, when the analysts downgraded their forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the current consensus, from the dual analysts covering Ascopiave, is for revenues of €146m in 2022, which would reflect a discernible 3.2% reduction in Ascopiave's sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of €190m in 2022. The consensus view seems to have become more pessimistic on Ascopiave, noting the pretty serious reduction to revenue estimates in this update.

See our latest analysis for Ascopiave

The consensus price target fell 5.7% to €4.10, with the analysts clearly less optimistic about Ascopiave's valuation following this update. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Ascopiave at €4.50 per share, while the most bearish prices it at €3.70. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Ascopiave is an easy business to forecast or the underlying assumptions are obvious.

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. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2022 compared to the historical decline of 32% per annum 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 0.9% annually. So while a broad number of companies are forecast to grow, unfortunately Ascopiave is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue 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 Ascopiave's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Ascopiave after today.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Ascopiave's business, like its declining profit margins. For more information, you can click here to discover this and the 2 other risks we've identified.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.