Time To Worry? Analysts Just Downgraded Their Schibsted ASA (OB:SCHA) Outlook

One thing we could say about the analysts on Schibsted ASA (OB:SCHA) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the current consensus from Schibsted's twelve analysts is for revenues of kr8.9b in 2025 which - if met - would reflect a satisfactory 7.5% increase on its sales over the past 12 months. Statutory earnings per share are supposed to nosedive 75% to kr5.10 in the same period. Prior to this update, the analysts had been forecasting revenues of kr10b and earnings per share (EPS) of kr5.69 in 2025. Indeed, we can see that the analysts are a lot more bearish about Schibsted's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Schibsted

Despite the cuts to forecast earnings, there was no real change to the kr368 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Schibsted's growth to accelerate, with the forecast 7.5% annualised growth to the end of 2025 ranking favourably alongside historical growth of 2.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Schibsted is expected to grow much faster than its 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, although our data indicates revenues are expected to perform better than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Schibsted after today.

That said, the analysts might have good reason to be negative on Schibsted, given its declining profit margins. For more information, you can click here to discover this and the 2 other risks we've identified.

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 with high insider ownership.

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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.