Analysts Are More Bearish On Ibersol, S.G.P.S., S.A. (ELI:IBS) Than They Used To Be

The latest analyst coverage could presage a bad day for Ibersol, S.G.P.S., S.A. (ELI:IBS), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After the downgrade, the three analysts covering Ibersol S.G.P.S are now predicting revenues of €411m in 2023. If met, this would reflect an okay 7.1% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to plummet 35% to €0.31 in the same period. Before this latest update, the analysts had been forecasting revenues of €417m and earnings per share (EPS) of €0.43 in 2023. So there's definitely been a decline in analyst sentiment in the latest consensus numbers, noting the large cut to EPS forecasts.

Check out our latest analysis for Ibersol S.G.P.S

Although the analysts have revised their earnings forecasts for this year, they've also lifted the consensus price target 10% to €11.30, suggesting the revised estimates are not indicative of a weaker long-term future for the business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Ibersol S.G.P.S analyst has a price target of €14.20 per share, while the most pessimistic values it at €9.80. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Ibersol S.G.P.S' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 7.1% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 11% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 9.1% per year. Although Ibersol S.G.P.S' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Ibersol S.G.P.S. There were no major changes to revenue forecasts, with analysts still expecting the business to grow slower than the wider market. The rising price target is a puzzle, but still - with a serious cut to this year's outlook, we wouldn't be surprised if investors were a bit wary of Ibersol S.G.P.S.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Ibersol S.G.P.S 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.