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Analysts Just Slashed Their Belvoir Group PLC (LON:BLV) EPS Numbers

Today is shaping up negative for Belvoir Group PLC (LON:BLV) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the latest downgrade, the two analysts covering Belvoir Group provided consensus estimates of UK£14m revenue in 2020, which would reflect a sizeable 29% decline on its sales over the past 12 months. Statutory earnings per share are supposed to plunge 65% to UK£0.047 in the same period. Previously, the analysts had been modelling revenues of UK£23m and earnings per share (EPS) of UK£0.14 in 2020. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Belvoir Group

AIM:BLV Past and Future Earnings April 4th 2020
AIM:BLV Past and Future Earnings April 4th 2020

The consensus price target fell 16% to UK£1.87, with the weaker earnings outlook clearly leading analyst valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Belvoir Group, with the most bullish analyst valuing it at UK£2.05 and the most bearish at UK£1.69 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

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. We would highlight that sales are expected to reverse, with the forecast 29% revenue decline a notable change from historical growth of 23% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 2.9% annually for the foreseeable future. The forecasts do look bearish for Belvoir Group, since they're expecting it to shrink faster than the 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 Belvoir Group. Unfortunately they also cut their revenue estimates for this year, and they expect sales to lag the wider market. That said, earnings per share are more important for creating value for shareholders. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

A high debt burden combined with a downgrade of this magnitude always gives us some reason for concern, especially if these forecasts are just the first sign of a business downturn. See why we're concerned about Belvoir Group's balance sheet by visiting our risks dashboard for free on our platform here.

We also provide an overview of the Belvoir Group Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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