One Climeon AB (publ) (STO:CLIME B) Analyst Is Reducing Their Forecasts For Next Year

Today is shaping up negative for Climeon AB (publ) (STO:CLIME B) shareholders, with the covering analyst delivering a substantial negative revision to next year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

Following the downgrade, the most recent consensus for Climeon from its single analyst is for revenues of kr326m in 2021 which, if met, would be a sizeable 178% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 36% to kr1.81. Yet prior to the latest estimates, the analyst had been forecasting revenues of kr409m and losses of kr1.46 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for Climeon

The consensus price target fell 13% to kr70.00, with the analyst clearly concerned about the company following the weaker revenue and earnings outlook.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Climeon's past performance and to peers in the same industry. The analyst is definitely expecting Climeon's growth to accelerate, with the forecast 178% growth ranking favourably alongside historical growth of 52% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 38% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Climeon to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst increased their loss per share estimates for next year. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Climeon.

As you can see, this broker clearly isn't bullish, and there might be good reason for that. We've identified some potential issues with Climeon's financials, such as a short cash runway. Learn more, and discover the 2 other concerns we've identified, 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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