One Analyst Just Shaved Their Genovis AB (publ.) (STO:GENO) Forecasts Dramatically

Market forces rained on the parade of Genovis AB (publ.) (STO:GENO) shareholders today, when the covering analyst downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

Following the downgrade, the latest consensus from Genovis AB (publ.)'s single analyst is for revenues of kr115m in 2022, which would reflect a solid 18% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 48% to kr0.56. Previously, the analyst had been modelling revenues of kr143m and earnings per share (EPS) of kr0.84 in 2022. Indeed, we can see that the analyst is a lot more bearish about Genovis AB (publ.)'s prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Genovis AB (publ.)

It'll come as no surprise then, to learn that the analyst has cut their price target 5.6% to kr85.00.

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 Genovis AB (publ.)'s revenue growth is expected to slow, with the forecast 18% annualised growth rate until the end of 2022 being well below the historical 30% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 17% annually. So it's pretty clear that, while Genovis AB (publ.)'s revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Genovis AB (publ.) going out as far as 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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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.