Analyst Forecasts Just Became More Bearish On SNGN Romgaz SA (BVB:SNG)

Market forces rained on the parade of SNGN Romgaz SA (BVB:SNG) shareholders today, when the analysts downgraded their forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the consensus from SNGN Romgaz's four analysts is for revenues of RON10b in 2023, which would reflect a considerable 19% decline in sales compared to the last year of performance. Before the latest update, the analysts were foreseeing RON12b of revenue in 2023. It looks like forecasts have become a fair bit less optimistic on SNGN Romgaz, given the measurable cut to revenue estimates.

See our latest analysis for SNGN Romgaz

We'd point out that there was no major changes to their price target of RON53.54, suggesting the latest estimates were not enough to shift their view on the value of the business. 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 SNGN Romgaz, with the most bullish analyst valuing it at RON66.28 and the most bearish at RON41.00 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 24% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 23% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 6.9% annually for the foreseeable future. The forecasts do look bearish for SNGN Romgaz, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also forecasting for revenues to shrink at a quicker rate than companies in the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of SNGN Romgaz going forwards.

Unsatisfied? At least one of SNGN Romgaz's four analysts has provided estimates out to 2025, which can be seen for 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.