Candles Scandinavia AB (publ) (STO:CANDLE B) Analysts Are Reducing Their Forecasts For This Year

The latest analyst coverage could presage a bad day for Candles Scandinavia AB (publ) (STO:CANDLE B), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

After the downgrade, the dual analysts covering Candles Scandinavia are now predicting revenues of kr263m in 2024. If met, this would reflect a major 23% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 17,310% to kr1.87. Before this latest update, the analysts had been forecasting revenues of kr330m and earnings per share (EPS) of kr2.94 in 2024. Indeed, we can see that the analysts are a lot more bearish about Candles Scandinavia's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Candles Scandinavia

It'll come as no surprise then, to learn that the analysts have cut their price target 40% to kr63.50. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Candles Scandinavia analyst has a price target of kr71.00 per share, while the most pessimistic values it at kr56.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Candles Scandinavia is an easy business to forecast or the underlying assumptions are obvious.

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. It's pretty clear that there is an expectation that Candles Scandinavia's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 23% growth on an annualised basis. This is compared to a historical growth rate of 38% over the past three years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 1.5% annually. So it's clear that despite the slowdown in growth, Candles Scandinavia is still expected to grow meaningfully faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, they also downgraded their revenue estimates, and our data indicates sales are expected to outperform the wider market. Even so, earnings per share are more important to the intrinsic value of the business. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Candles Scandinavia.

There might be good reason for analyst bearishness towards Candles Scandinavia, like dilutive stock issuance over the past year. 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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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.