Catella AB (publ) (STO:CAT B) Analysts Just Slashed This Year's Revenue Estimates By 17%

The latest analyst coverage could presage a bad day for Catella AB (publ) (STO:CAT B), 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 consensus from three analysts covering Catella is for revenues of kr1.6b in 2024, implying a not inconsiderable 17% decline in sales compared to the last 12 months. Per-share earnings are expected to shoot up 1,925% to kr2.98. Prior to this update, the analysts had been forecasting revenues of kr2.0b and earnings per share (EPS) of kr3.02 in 2024. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a measurable cut to revenues and reconfirming their earnings per share estimates.

Check out our latest analysis for Catella

The consensus has reconfirmed its price target of kr45.00, showing that the analysts don't expect weaker sales expectationsthis year to have a material impact on Catella's market value.

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. One more thing stood out to us about these estimates, and it's the idea that Catella's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 31% to the end of 2024. This tops off a historical decline of 3.0% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 15% per year. So while a broad number of companies are forecast to grow, unfortunately Catella is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower 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 Catella after today.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Catella's business, like the risk of cutting its dividend. For more information, you can click here to discover this and the 2 other risks we've identified.

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 with high insider ownership.

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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.