The analyst covering Credit Bank of Moscow (public joint-stock company) (MCX:CBOM) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. 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 most recent consensus for Credit Bank of Moscow from its sole analyst is for revenues of ₽65b in 2020 which, if met, would be a substantial 65% increase on its sales over the past 12 months. Before the latest update, the analyst was foreseeing ₽75b of revenue in 2020. It looks like forecasts have become a fair bit less optimistic on Credit Bank of Moscow, given the substantial drop in revenue estimates.
The consensus price target fell 20% to ₽5.50, with the analyst clearly less optimistic about Credit Bank of Moscow’s valuation following this update.
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. The analyst is definitely expecting Credit Bank of Moscow’s growth to accelerate, with the forecast 65% growth ranking favourably alongside historical growth of 27% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.3% per year. Factoring in the forecast acceleration in revenue, it’s pretty clear that Credit Bank of Moscow is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analyst cut their revenue estimates for this year. They’re also forecasting more rapid revenue growth than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year’s forecasts, we’d be feeling a little more wary of Credit Bank of Moscow going forwards.
Still got questions? We have forecasts for Credit Bank of Moscow from one covering analyst, and you can see them free on our platform here.
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