The analysts covering Regal Partners Limited (ASX:RPL) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

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After the downgrade, the consensus from Regal Partners' four analysts is for revenues of AU$251m in 2025, which would reflect a noticeable 2.6% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to tumble 35% to AU$0.13 in the same period. Before this latest update, the analysts had been forecasting revenues of AU$322m and earnings per share (EPS) of AU$0.21 in 2025. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Regal Partners

It'll come as no surprise then, to learn that the analysts have cut their price target 11% to AU$4.24.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 2.6% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 26% 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 4.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Regal Partners is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Regal Partners. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Regal Partners' revenues are expected to grow 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.

There might be good reason for analyst bearishness towards Regal Partners, like major dilution from new stock issuance in the past year. Learn more, and discover the 2 other risks 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.