The analysts covering The Liberty Braves Group (NASDAQ:BATR.K) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. At US$21.10, shares are up 8.4% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.
After the downgrade, the consensus from Liberty Braves Group's three analysts is for revenues of US$239m in 2020, which would reflect a disturbing 50% decline in sales compared to the last year of performance. Before the latest update, the analysts were foreseeing US$290m of revenue in 2020. The consensus view seems to have become more pessimistic on Liberty Braves Group, noting the substantial drop in revenue estimates in this update.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast revenue decline of 50%, a significant reduction from annual growth of 17% 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 13% next year. It's pretty clear that Liberty Braves Group's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Liberty Braves Group this year. They also expect company revenue to perform worse than the wider market. 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 Liberty Braves Group after today.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Liberty Braves Group's financials, such as a short cash runway. For more information, you can click here to discover this and the 2 other risks we've identified.
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