Time To Worry? Analysts Are Downgrading Their Robert Walters plc (LON:RWA) Outlook
The latest analyst coverage could presage a bad day for Robert Walters plc (LON:RWA), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.
After the downgrade, the consensus from Robert Walters' four analysts is for revenues of UK£971m in 2024, which would reflect a not inconsiderable 8.7% decline in sales compared to the last year of performance. Per-share earnings are expected to step up 15% to UK£0.24. Prior to this update, the analysts had been forecasting revenues of UK£1.1b and earnings per share (EPS) of UK£0.33 in 2024. Indeed, we can see that the analysts are a lot more bearish about Robert Walters' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
Check out our latest analysis for Robert Walters
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. Over the past five years, revenues have declined around 3.0% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 8.7% decline in revenue until the end of 2024. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 5.8% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Robert Walters to suffer worse than the wider industry.
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 Robert Walters' revenues are expected to grow slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Robert Walters, and a few readers might choose to steer clear of the stock.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Robert Walters analysts - going out to 2026, 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.
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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.
