These Analysts Just Made A Notable Downgrade To Their PCF Group Spólka Akcyjna (WSE:PCF) EPS Forecasts

Market forces rained on the parade of PCF Group Spólka Akcyjna (WSE:PCF) shareholders today, when the analysts downgraded their forecasts for next year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business. Shares are up 8.0% to zł37.80 in the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

After the downgrade, the consensus from PCF Group Spólka Akcyjna's three analysts is for revenues of zł168m in 2023, which would reflect a measurable 6.3% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to descend 14% to zł1.53 in the same period. Prior to this update, the analysts had been forecasting revenues of zł218m and earnings per share (EPS) of zł1.78 in 2023. Indeed, we can see that the analysts are a lot more bearish about PCF Group Spólka Akcyjna's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for PCF Group Spólka Akcyjna

The consensus price target fell 8.4% to zł43.00, with the weaker earnings outlook clearly leading analyst valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on PCF Group Spólka Akcyjna, with the most bullish analyst valuing it at zł52.90 and the most bearish at zł32.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await PCF Group Spólka Akcyjna shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 5.0% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 27% 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 18% per year. It's pretty clear that PCF Group Spólka Akcyjna's revenues are expected to perform substantially worse 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, and industry data suggests that PCF Group Spólka Akcyjna's revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

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 PCF Group Spólka Akcyjna going out to 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.