This Analyst Just Downgraded Their Iniziative Bresciane S.p.A. (BIT:IB) EPS Forecasts

One thing we could say about the covering analyst on Iniziative Bresciane S.p.A. (BIT:IB) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the current consensus, from the solo analyst covering Iniziative Bresciane, is for revenues of €18m in 2022, which would reflect a concerning 23% reduction in Iniziative Bresciane's sales over the past 12 months. Statutory earnings per share are anticipated to tumble 21% to €0.21 in the same period. Previously, the analyst had been modelling revenues of €28m and earnings per share (EPS) of €1.15 in 2022. Indeed, we can see that the analyst is a lot more bearish about Iniziative Bresciane's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

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The consensus price target fell 19% to €17.50, with the weaker earnings outlook clearly leading analyst valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Iniziative Bresciane's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 23% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 10% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.8% annually for the foreseeable future. It's pretty clear that Iniziative Bresciane's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Iniziative Bresciane's revenues are expected to grow slower 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 Iniziative Bresciane.

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 Iniziative Bresciane's business, like the risk of cutting its dividend. For more information, you can click here to discover this and the 2 other risks we've identified.

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.