These Analysts Just Made A Huge Downgrade To Their Southern Province Cement Company (TADAWUL:3050) EPS Forecasts

The analysts covering Southern Province Cement Company (TADAWUL:3050) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the latest downgrade, the current consensus, from the four analysts covering Southern Province Cement, is for revenues of ر.س1.1b in 2023, which would reflect a not inconsiderable 9.1% reduction in Southern Province Cement's sales over the past 12 months. Statutory earnings per share are supposed to plunge 24% to ر.س1.19 in the same period. Before this latest update, the analysts had been forecasting revenues of ر.س1.3b and earnings per share (EPS) of ر.س1.93 in 2023. Indeed, we can see that the analysts are a lot more bearish about Southern Province Cement's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Southern Province Cement

Analysts made no major changes to their price target of ر.س53.30, suggesting the downgrades are not expected to have a long-term impact on Southern Province Cement's valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 17% by the end of 2023. This indicates a significant reduction from annual growth of 4.3% 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 7.4% per year. It's pretty clear that Southern Province Cement's revenues are expected to perform substantially worse than 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 Southern Province Cement. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Southern Province Cement.

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 Southern Province Cement going out to 2025, and you can see them 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.