Analyst Forecasts Just Became More Bearish On Nanofilm Technologies International Limited (SGX:MZH)

Market forces rained on the parade of Nanofilm Technologies International Limited (SGX:MZH) shareholders today, when the analysts downgraded their forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the consensus from eight analysts covering Nanofilm Technologies International is for revenues of S$177m in 2023, implying a stressful 26% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing S$223m of revenue in 2023. It looks like forecasts have become a fair bit less optimistic on Nanofilm Technologies International, given the pretty serious reduction to revenue estimates.

View our latest analysis for Nanofilm Technologies International

Notably, the analysts have cut their price target 9.6% to S$1.07, suggesting concerns around Nanofilm Technologies International's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Nanofilm Technologies International'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 45% by the end of 2023. This indicates a significant reduction from annual growth of 20% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 12% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Nanofilm Technologies International is expected to lag 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 anticipating slower revenue growth than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Nanofilm Technologies International's future valuation. 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 Nanofilm Technologies International after today.

Need some more information? At least one of Nanofilm Technologies International's eight analysts has provided estimates out to 2025, which can be seen 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.