Analysts Have Just Cut Their Kitron ASA (OB:KIT) Revenue Estimates By 12%

One thing we could say about the analysts on Kitron ASA (OB:KIT) - 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 forecast from Kitron's dual analysts is for revenues of €8.7b in 2024, which would reflect a major improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 1,112% to €2.79. Before this latest update, the analysts had been forecasting revenues of €9.8b and earnings per share (EPS) of €2.95 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a minor downgrade to earnings per share numbers as well.

View our latest analysis for Kitron

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kitron's past performance and to peers in the same industry. The analysts are definitely expecting Kitron's growth to accelerate, with the forecast 7x annualised growth to the end of 2024 ranking favourably alongside historical growth of 19% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 22% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Kitron to grow faster than 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, although our data indicates revenues are expected to perform better than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Kitron after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Kitron going out as far as 2025, and you can see them 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.