One Analyst Just Shaved Their Corporación América Airports S.A. (NYSE:CAAP) Forecasts Dramatically

By
Simply Wall St
Published
May 20, 2021
NYSE:CAAP
Source: Shutterstock

The analyst covering Corporación América Airports S.A. (NYSE:CAAP) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon. The stock price has risen 5.7% to US$5.95 over the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the downgrade, the current consensus from Corporación América Airports' solo analyst is for revenues of US$684m in 2021 which - if met - would reflect a decent 13% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 30% to US$1.11. However, before this estimates update, the consensus had been expecting revenues of US$861m and US$0.56 per share in losses. Ergo, there's been a clear change in sentiment, with the analyst administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Corporación América Airports

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NYSE:CAAP Earnings and Revenue Growth May 21st 2021

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Corporación América Airports is forecast to grow faster in the future than it has in the past, with revenues expected to display 17% annualised growth until the end of 2021. If achieved, this would be a much better result than the 17% annual decline over the past three 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 it looks like Corporación América Airports is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analyst increased their loss per share estimates for this year. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like the analyst has become a lot more bearish on Corporación América Airports, and their negativity could be grounds for caution.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Corporación América Airports going out as far as 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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