Need To Know: Analysts Just Made A Substantial Cut To Their Public Joint-Stock Company Moscow United Electric Grid Company (MCX:MSRS) Estimates
The latest analyst coverage could presage a bad day for Public Joint-Stock Company Moscow United Electric Grid Company (MCX:MSRS), 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) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following this downgrade, Moscow United Electric Grid's three analysts are forecasting 2020 revenues to be ₽160b, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 5.1% to ₽0.17. Before this latest update, the analysts had been forecasting revenues of ₽215b and earnings per share (EPS) of ₽0.24 in 2020. Indeed, we can see that the analysts are a lot more bearish about Moscow United Electric Grid's prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.
See our latest analysis for Moscow United Electric Grid
Analysts made no major changes to their price target of ₽1.10, suggesting the downgrades are not expected to have a long-term impact on Moscow United Electric Grid'svaluation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Moscow United Electric Grid analyst has a price target of ₽1.50 per share, while the most pessimistic values it at ₽0.73. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with the forecast 0.7% revenue decline a notable change from historical growth of 5.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.3% annually for the foreseeable future. It's pretty clear that Moscow United Electric Grid's 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 Moscow United Electric Grid. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Moscow United Electric Grid after the downgrade.
Unfortunately, the earnings downgrade - if accurate - may also place pressure on Moscow United Electric Grid'smountain of debt, which could lead to some belt tightening for shareholders. See why we're concerned about Moscow United Electric Grid's balance sheet by visiting our risks dashboard for free on our platform here.
You can also see our analysis of Moscow United Electric Grid's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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