This Bawan Company (TADAWUL:1302) Analyst Is Way More Bearish Than They Used To Be

The latest analyst coverage could presage a bad day for Bawan Company (TADAWUL:1302), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the current consensus, from the solitary analyst covering Bawan, is for revenues of ر.س3.1b in 2023, which would reflect a definite 12% reduction in Bawan's sales over the past 12 months. Per-share earnings are expected to ascend 13% to ر.س2.40. Before this latest update, the analyst had been forecasting revenues of ر.س3.7b and earnings per share (EPS) of ر.س2.80 in 2023. Indeed, we can see that the analyst is a lot more bearish about Bawan's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Bawan

The consensus price target fell 8.1% to ر.س34.00, with the weaker earnings outlook clearly leading analyst valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Bawan's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 23% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 14% 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 9.3% per year. It's pretty clear that Bawan's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Bawan. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Bawan.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks 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.