One Melhus Sparebank (OB:MELG) Analyst Just Made A Major Cut To Next Year's Estimates

One thing we could say about the covering analyst on Melhus Sparebank (OB:MELG) - 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 one analyst covering Melhus Sparebank, is for revenues of kr269m in 2024, which would reflect a not inconsiderable 16% reduction in Melhus Sparebank's sales over the past 12 months. Statutory earnings per share are supposed to decline 18% to kr13.73 in the same period. Before this latest update, the analyst had been forecasting revenues of kr320m and earnings per share (EPS) of kr16.23 in 2024. Indeed, we can see that the analyst is a lot more bearish about Melhus Sparebank's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Melhus Sparebank

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 16% by the end of 2024. This indicates a significant reduction from annual growth of 8.4% 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 1.0% per year. It's pretty clear that Melhus Sparebank'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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the serious cut to this year's outlook, it's clear that the analyst has turned more bearish on Melhus Sparebank, and we wouldn't blame shareholders for feeling a little more cautious themselves.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Melhus Sparebank going out as far as 2026, and you can see them 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.