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One Corporación América Airports S.A. (NYSE:CAAP) Analyst Just Made A Major Cut To Next Year's Estimates

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  • CAAP

The latest analyst coverage could presage a bad day for Corporación América Airports S.A. (NYSE:CAAP), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the lone analyst covering Corporación América Airports is now predicting revenues of US$684m in 2021. If met, this would reflect a sizeable 55% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 38% to US$1.11. Yet before this consensus update, the analyst had been forecasting revenues of US$861m and losses of US$0.56 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a serious cut to their revenue forecasts while also expecting losses per share to increase.

See our latest analysis for Corporación América Airports

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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. For example, we noticed that Corporación América Airports' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 79% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 24% a year over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 15% annually. So it looks like Corporación América Airports is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Corporación América Airports. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After a cut like that, investors could be forgiven for thinking the analyst is a lot more bearish on Corporación América Airports, and a few readers might choose to steer clear of the stock.

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.

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.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.