The latest analyst coverage could presage a bad day for Johnson Outdoors Inc. (NASDAQ:JOUT), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

After the downgrade, the consensus from Johnson Outdoors' single analyst is for revenues of US$607m in 2024, which would reflect a small 2.8% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to be US$1.72, approximately in line with the last 12 months. Previously, the analyst had been modelling revenues of US$674m and earnings per share (EPS) of US$2.67 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analyst has cut their price target 12% to US$66.00.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 3.7% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 6.8% 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 2.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Johnson Outdoors is expected to lag the wider industry.

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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of Johnson Outdoors.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2025, 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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