One thing we could say about the covering analyst on Camellia Plc (LON:CAM) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. 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.

Following the downgrade, the most recent consensus for Camellia from its lone analyst is for revenues of UK£278m in 2024 which, if met, would be a satisfactory 2.1% increase on its sales over the past 12 months. Losses are supposed to balloon 361% to UK£6.18 per share. Yet before this consensus update, the analyst had been forecasting revenues of UK£309m and losses of UK£2.82 per share in 2024. Ergo, there's been a clear change in sentiment, with the analyst administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

See our latest analysis for Camellia

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Camellia's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 2.1% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 1.8% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.8% annually for the foreseeable future. So although Camellia's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Camellia. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After a cut like that, investors could be forgiven for thinking the analyst is a lot more bearish on Camellia, and a few readers might choose to steer clear of the stock.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Camellia going out as far as 2026, 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.

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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.