The latest analyst coverage could presage a bad day for Ferronordic AB (publ) (STO:FNM), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the downgrade, the latest consensus from Ferronordic's three analysts is for revenues of kr6.5b in 2022, which would reflect a satisfactory 3.9% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of kr7.3b in 2022. It looks like forecasts have become a fair bit less optimistic on Ferronordic, given the measurable cut to revenue estimates.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Ferronordic's revenue growth is expected to slow, with the forecast 3.9% annualised growth rate until the end of 2022 being well below the historical 22% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.3% per year. Factoring in the forecast slowdown in growth, it seems obvious that Ferronordic is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Ferronordic after today.
Need some more information? We have estimates for Ferronordic from its three analysts out until 2024, 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.
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