These Analysts Just Made A Meaningful Downgrade To Their Dr. Martens plc (LON:DOCS) EPS Forecasts
One thing we could say about the analysts on Dr. Martens plc (LON:DOCS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.
Following the latest downgrade, the current consensus, from the eight analysts covering Dr. Martens, is for revenues of UK£903m in 2024, which would reflect a small 7.6% reduction in Dr. Martens' sales over the past 12 months. Statutory earnings per share are supposed to nosedive 22% to UK£0.083 in the same period. Prior to this update, the analysts had been forecasting revenues of UK£1.0b and earnings per share (EPS) of UK£0.10 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.
See our latest analysis for Dr. Martens
It'll come as no surprise then, to learn that the analysts have cut their price target 13% to UK£1.35.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 15% by the end of 2024. This indicates a significant reduction from annual growth of 11% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.0% per year. It's pretty clear that Dr. Martens' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Dr. Martens. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Dr. Martens' revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Dr. Martens.
Unfortunately, the earnings downgrade - if accurate - may also place pressure on Dr. Martens' mountain of debt, which could lead to some belt tightening for shareholders. To see more of our financial analysis, you can click through to our free platform to learn more about its balance sheet and specific concerns we've identified.
We also provide an overview of the Dr. Martens Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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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.
