One thing we could say about the analyst, DATRON-AG (ETR:DAR) – they are not optimistic as they have just significantly revised downward their short-term (statutory) forecasts for the company. Both revenue and earnings per share (EPS) forecasts have come under scrutiny, suggesting that the analyst has strong disdain for the company. The share price has risen 5.1% to €8.25 in the past week. We are curious to see if the downgrade is enough to change investor sentiment towards the company.
Following the latest downgrade, the only analyst covering DATRON is currently expecting revenues of €61m in 2024, which would represent a measurable 5.3% decline in DATRON’s revenues over the past 12 months. Statutory earnings per share are expected to fall 59% to €0.46 over the same period. Prior to this latest update, the analyst had been forecasting revenues of €68m and earnings per share (EPS) of €0.90 in 2024. In fact, we can see that the analyst is much more pessimistic about DATRON’s prospects, making a measurable cut to revenue estimates and also drastically reducing its EPS estimates.
Check out our latest analysis for DATRON
Therefore, it should come as no surprise that analysts have lowered their price target by 11% to €15.91.
Of course, these forecasts can also be viewed in the context of the industry itself. We would like to highlight that revenues are expected to decline by 5.3% by the end of 2024. This is a notable change from the historical growth of 4.1% over the past five years. In contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to grow revenues by 4.5% per year for the foreseeable future. It is quite clear that DATRON’s revenues are expected to be significantly worse than the industry as a whole.
The conclusion
The biggest issue with the new estimates is that the analyst has lowered their earnings per share estimates, suggesting that DATRON is facing business difficulties ahead. Unfortunately, they have also lowered their revenue estimates, and the latest forecasts suggest that the company’s revenue growth will be slower than the wider market. Given a significant cut to this year’s expectations and a declining price target, we wouldn’t be surprised if investors became cautious on DATRON.
After such a downgrade, it’s pretty clear that previous forecasts were too optimistic. In addition, we’ve identified several potential issues with DATRON’s business, such as concerns about the quality of earnings. Learn more and discover the 1 other mark we identified for free here on our platform.
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