Yahoo Finance One Analyst Just Shaved Their Harmony Energy Income Trust Plc (LON:HEIT) Forecasts Dramatically
The latest analyst coverage could presage a bad day for Harmony Energy Income Trust Plc ( LON:HEIT ), 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 consensus from Harmony Energy Income Trust's single analyst is for revenues of UK£46m in 2023. Statutory earnings per share are anticipated to sink 12% to UK£0.19 in the same period. Prior to this update, the analyst had been forecasting revenues of UK£54m and earnings per share (EPS) of UK£0.22 in 2023. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a real cut to earnings per share numbers as well.
View our latest analysis for Harmony Energy Income Trust
Despite the cuts to forecast earnings, there was no real change to the UK£1.34 price target, showing that the analyst don't think the changes have a meaningful impact on its intrinsic value. 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 Harmony Energy Income Trust analyst has a price target of UK£1.41 per share, while the most pessimistic values it at UK£1.35. This is a very narrow spread of estimates, implying either that Harmony Energy Income Trust is an easy company to value, or - more likely - the analyst is relying heavily on some key assumptions.
The Bottom Line
The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Harmony Energy Income Trust.
That said, the analyst might have good reason to be negative on Harmony Energy Income Trust, given concerns around earnings quality. Learn more, and discover the 2 other warning signs we've identified, for free on our platform here.
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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.
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