The ALPEK, S.A.B. de C.V. (BMV:ALPEKA) Analysts Have Been Trimming Their Sales Forecasts

One thing we could say about the analysts on ALPEK, S.A.B. de C.V. (BMV:ALPEKA) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the current consensus, from the eleven analysts covering ALPEK. de, is for revenues of Mex$155b in 2023, which would reflect a disturbing 24% reduction in ALPEK. de's sales over the past 12 months. Statutory earnings per share are anticipated to nosedive 36% to Mex$2.73 in the same period. Prior to this update, the analysts had been forecasting revenues of Mex$176b and earnings per share (EPS) of Mex$2.85 in 2023. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a small dip in earnings per share numbers as well.

Check out our latest analysis for ALPEK. de

Analysts made no major changes to their price target of Mex$30.61, suggesting the downgrades are not expected to have a long-term impact on ALPEK. de's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on ALPEK. de, with the most bullish analyst valuing it at Mex$37.00 and the most bearish at Mex$21.00 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 30% by the end of 2023. This indicates a significant reduction from annual growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.3% per year. It's pretty clear that ALPEK. de's revenues are expected to perform substantially worse 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that ALPEK. de's revenues are expected to grow slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on ALPEK. de 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 ALPEK. de's business, like a weak balance sheet. For more information, you can click here to discover this and the 2 other flags we've identified.

We also provide an overview of the ALPEK. de Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.