Bearish: Analysts Just Cut Their Aker Carbon Capture ASA (OB:ACC) Revenue and EPS estimates

The analysts covering Aker Carbon Capture ASA (OB:ACC) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the current consensus from Aker Carbon Capture's eight analysts is for revenues of kr1.2b in 2023 which - if met - would reflect a sizeable 50% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 29% to kr0.24. However, before this estimates update, the consensus had been expecting revenues of kr1.4b and kr0.21 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 Aker Carbon Capture

There was no major change to the consensus price target of kr21.50, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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 Aker Carbon Capture, with the most bullish analyst valuing it at kr30.00 and the most bearish at kr13.00 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Aker Carbon Capture's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 50% growth on an annualised basis. This is compared to a historical growth rate of 115% over the past year. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 1.4% annually. Factoring in the forecast slowdown in growth, it's pretty clear that Aker Carbon Capture is still expected to grow faster 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 Aker Carbon Capture. Unfortunately, they also downgraded their revenue estimates, and our data indicates sales are expected to outperform the wider market. Even so, earnings per share are more important to the intrinsic value of the business. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Aker Carbon Capture.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Aker Carbon Capture going out to 2025, 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.