Analysts Just Shaved Their BE Semiconductor Industries N.V. (AMS:BESI) Forecasts Dramatically

The latest analyst coverage could presage a bad day for BE Semiconductor Industries N.V. (AMS:BESI), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. Surprisingly the share price has been buoyant, rising 24% to €52.70 in the past 7 days. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.

Following the latest downgrade, the nine analysts covering BE Semiconductor Industries provided consensus estimates of €657m revenue in 2023, which would reflect a chunky 13% decline on its sales over the past 12 months. Statutory earnings per share are supposed to dive 20% to €2.68 in the same period. Previously, the analysts had been modelling revenues of €733m and earnings per share (EPS) of €3.21 in 2023. Indeed, we can see that the analysts are a lot more bearish about BE Semiconductor Industries' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for BE Semiconductor Industries

It'll come as no surprise then, to learn that the analysts have cut their price target 6.2% to €67.00. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values BE Semiconductor Industries at €90.00 per share, while the most bearish prices it at €50.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the BE Semiconductor Industries' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 11% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 7.2% 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 13% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - BE Semiconductor Industries is expected to lag 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 BE Semiconductor Industries' revenues are expected to grow 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 BE Semiconductor Industries.

There might be good reason for analyst bearishness towards BE Semiconductor Industries, like dilutive stock issuance over the past year. Learn more, and discover the 1 other warning sign we've identified, for 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.