Grupo Gicsa S.A.B. de C.V. (BMV:GICSAB) Analysts Are Reducing Their Forecasts For This Year

Market forces rained on the parade of Grupo Gicsa S.A.B. de C.V. (BMV:GICSAB) shareholders today, when the analysts downgraded their forecasts for this year. 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 consensus from twin analysts covering Grupo Gicsa. de is for revenues of Mex$3.9b in 2022, implying an uncomfortable 15% decline in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 57% to Mex$0.18. However, before this estimates update, the consensus had been expecting revenues of Mex$4.7b and Mex$0.06 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Grupo Gicsa. de

The consensus price target fell 5.3% to Mex$3.60, implicitly signalling that lower earnings per share are a leading indicator for Grupo Gicsa. de's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Grupo Gicsa. de, with the most bullish analyst valuing it at Mex$5.00 and the most bearish at Mex$2.20 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Grupo Gicsa. de's past performance and to peers in the same industry. Over the past five years, revenues have declined around 2.0% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 27% decline in revenue until the end of 2022. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 9.1% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Grupo Gicsa. de to suffer worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Grupo Gicsa. de. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Grupo Gicsa. de.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

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.