Need To Know: The Consensus Just Cut Its Hotel Chocolat Group Plc (LON:HOTC) Estimates For 2020

Today is shaping up negative for Hotel Chocolat Group Plc (LON:HOTC) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, the current consensus, from the two analysts covering Hotel Chocolat Group, is for revenues of UK£119m in 2020, which would reflect a not inconsiderable 17% reduction in Hotel Chocolat Group's sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of UK£151m in 2020. It looks like forecasts have become a fair bit less optimistic on Hotel Chocolat Group, given the pretty serious reduction to revenue estimates.

View our latest analysis for Hotel Chocolat Group

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hotel Chocolat Group's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with the forecast 17% revenue decline a notable change from historical growth of 12% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.6% annually for the foreseeable future. It's pretty clear that Hotel Chocolat Group'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 revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Hotel Chocolat Group after today.

Hungry for more information? At least one of Hotel Chocolat Group's two analysts has provided estimates out to 2022, which can be seen for 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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