Bearish: Analysts Just Cut Their Industries Qatar Q.P.S.C. (DSM:IQCD) Revenue and EPS estimates

Market forces rained on the parade of Industries Qatar Q.P.S.C. (DSM:IQCD) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business. At ر.ق18.30, shares are up 9.1% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the downgrade, the consensus from five analysts covering Industries Qatar Q.P.S.C is for revenues of ر.ق12b in 2022, implying an uneasy 13% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to sink 20% to ر.ق1.07 in the same period. Before this latest update, the analysts had been forecasting revenues of ر.ق14b and earnings per share (EPS) of ر.ق1.37 in 2022. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Industries Qatar Q.P.S.C

Analysts made no major changes to their price target of ر.ق18.23, suggesting the downgrades are not expected to have a long-term impact on Industries Qatar Q.P.S.C's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Industries Qatar Q.P.S.C at ر.ق20.30 per share, while the most bearish prices it at ر.ق15.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Industries Qatar Q.P.S.C is an easy business to forecast or the underlying assumptions are obvious.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 13% by the end of 2022. This indicates a significant reduction from annual growth of 21% 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 6.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Industries Qatar Q.P.S.C is expected to lag the wider 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 Industries Qatar Q.P.S.C. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Industries Qatar Q.P.S.C's revenues are expected to grow slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Industries Qatar Q.P.S.C after the downgrade.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Industries Qatar Q.P.S.C going out to 2024, 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.