One thing we could say about the analysts on

Aubay Société Anonyme

(

EPA:AUB

) - they aren't optimistic,étépros and cons of blue devil rear main sealer having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. Investors however, have been notably more optimistic about Aubay Société Anonyme recently, with the stock price up an impressive 14% to €20.10 in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

After the downgrade, the consensus from Aubay Société Anonyme's two analysts is for revenues of €397m in 2020, which would reflect a noticeable 4.9% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to crater 38% to €1.25 in the same period. Before this latest update, the analysts had been forecasting revenues of €449m and earnings per share (EPS) of €2.12 in 2020. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for Aubay Société Anonyme

ENXTPA:AUB Past and Future Earnings April 1st 2020

The consensus price target fell 19% to €30.43, with the weaker earnings outlook clearly leading analyst valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Aubay Société Anonyme analyst has a price target of €38.50 per share, while the most pessimistic values it at €26.00. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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 sales are expected to reverse, with the forecast 4.9% revenue decline a notable change from historical growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.7% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Aubay Société Anonyme is expected to lag the wider industry.

Story continues

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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Aubay Société Anonyme's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Aubay Société Anonyme.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2022, 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

.

If you spot an error that warrants correction, please contact the editor at

[email protected]

. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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