What You Need To Know About The Avance Gas Holding Ltd (OB:AGAS) Analyst Downgrade Today

One thing we could say about the analysts on Avance Gas Holding Ltd (OB:AGAS) - 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.

After the downgrade, the consensus from Avance Gas Holding's four analysts is for revenues of US$248m in 2024, which would reflect a sizeable 30% decline in sales compared to the last year of performance. Per-share earnings are expected to leap 27% to US$2.72. Prior to this update, the analysts had been forecasting revenues of US$287m and earnings per share (EPS) of US$2.74 in 2024. Indeed we can see that the consensus opinion has undergone some fundamental changes following the recent consensus updates, with a measurable cut to revenues and some minor tweaks to earnings numbers.

See our latest analysis for Avance Gas Holding

The consensus price target was reduced 9.3% to kr156, with the lower revenue forecasts indicating negative sentiment towards Avance Gas Holding, even though earnings forecasts were unchanged.

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 24% by the end of 2024. This indicates a significant reduction from annual growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 2.9% annually for the foreseeable future. The forecasts do look bearish for Avance Gas Holding, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Unfortunately they also cut their revenue estimates for next year, and they expect sales to lag the wider market. That said, earnings per share are more important for creating value for shareholders. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on Avance Gas Holding after today.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Avance Gas Holding, including the risk of cutting its dividend. Learn more, and discover the 2 other risks we've identified, for free on our platform here.

You can also see our analysis of Avance Gas Holding's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.