Aros Bostadsutveckling AB (publ) (STO:AROS) Analysts Are More Bearish Than They Used To Be

The analysts covering Aros Bostadsutveckling AB (publ) (STO:AROS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the three analysts covering Aros Bostadsutveckling are now predicting revenues of kr1.2b in 2023. If met, this would reflect a sizeable 112% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 335% to kr1.90. Previously, the analysts had been modelling revenues of kr1.4b and earnings per share (EPS) of kr2.90 in 2023. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

See our latest analysis for Aros Bostadsutveckling

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Aros Bostadsutveckling's growth to accelerate, with the forecast 3x annualised growth to the end of 2023 ranking favourably alongside historical growth of 36% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Aros Bostadsutveckling to grow 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. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Aros Bostadsutveckling, and we wouldn't blame shareholders for feeling a little more cautious themselves.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Aros Bostadsutveckling, including concerns around earnings quality. For more information, you can click here to discover this and the 1 other risk 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 that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.