Bergs Timber AB (publ) (STO:BRG B) Analysts Just Slashed This Year's Revenue Estimates By 11%

Market forces rained on the parade of Bergs Timber AB (publ) (STO:BRG B) shareholders today, when the analysts downgraded their forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. At kr5.28, shares are up 6.9% in the past 7 days. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the latest downgrade, the current consensus, from the two analysts covering Bergs Timber, is for revenues of kr2.6b in 2022, which would reflect a measurable 7.1% reduction in Bergs Timber's sales over the past 12 months. Before the latest update, the analysts were foreseeing kr3.0b of revenue in 2022. The consensus view seems to have become more pessimistic on Bergs Timber, noting the measurable cut to revenue estimates in this update.

See our latest analysis for Bergs Timber

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Bergs Timber's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 7.1% by the end of 2022. This indicates a significant reduction from annual growth of 17% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 1.0% annually for the foreseeable future. So it's pretty clear that Bergs Timber's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also forecasting for revenues to shrink at a quicker rate than companies in the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Bergs Timber after today.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Bergs Timber, including concerns around earnings quality. Learn more, and discover the 1 other flag 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.