Analysts Just Slashed Their Global Fashion Group S.A. (ETR:GFG) EPS Numbers
The analysts covering Global Fashion Group S.A. (ETR:GFG) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. 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 three analysts covering Global Fashion Group provided consensus estimates of €825m revenue in 2023, which would reflect a considerable 18% decline on its sales over the past 12 months. Losses are expected to be contained, narrowing 11% per share from last year to €0.67 per share. However, before this estimates update, the consensus had been expecting revenues of €931m and €0.59 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
View our latest analysis for Global Fashion Group
Analysts lifted their price target 25% to €1.40, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One more thing stood out to us about these estimates, and it's the idea that Global Fashion Group's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 33% to the end of 2023. This tops off a historical decline of 14% a year 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 6.3% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Global Fashion Group to suffer worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The increasing price target is not intuitively what we would expect to see, given these downgrades, and we'd suggest shareholders revisit their investment thesis before making a decision.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Global Fashion Group analysts - going out to 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
