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Time To Worry? Analysts Are Downgrading Their Avient Corporation (NYSE:AVNT) Outlook

Today is shaping up negative for Avient Corporation (NYSE:AVNT) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. 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 Avient's four analysts is for revenues of US$4.3b in 2022, which would reflect an uneasy 14% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to reduce 4.9% to US$2.63 in the same period. Before this latest update, the analysts had been forecasting revenues of US$5.1b and earnings per share (EPS) of US$3.29 in 2022. Indeed, we can see that the analysts are a lot more bearish about Avient's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Avient

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earnings-and-revenue-growth

It'll come as no surprise then, to learn that the analysts have cut their price target 8.1% to US$52.25. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Avient at US$61.00 per share, while the most bearish prices it at US$50.00. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

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Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 27% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.3% per year. It's pretty clear that Avient's revenues are expected to perform substantially 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Avient analysts - going out to 2024, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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