One thing we could say about the covering analyst on Lanvin Group Holdings Limited (NYSE:LANV) - 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. At US$2.00, shares are up 9.3% in the past 7 days. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the latest downgrade, the current consensus, from the one analyst covering Lanvin Group Holdings, is for revenues of €328m in 2024, which would reflect an uncomfortable 14% reduction in Lanvin Group Holdings' sales over the past 12 months. Losses are presumed to reduce, shrinking 14% per share from last year to €0.91. Yet before this consensus update, the analyst had been forecasting revenues of €375m and losses of €0.75 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for Lanvin Group Holdings

The consensus price target fell 16% to €1.44, implicitly signalling that lower earnings per share are a leading indicator for Lanvin Group Holdings' valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Lanvin Group Holdings' past performance and to peers in the same industry. Over the past year, revenues have declined around 12% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 27% decline in revenue until the end of 2024. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 5.3% per year. So while a broad number of companies are forecast to grow, unfortunately Lanvin Group Holdings is expected to see its sales affected worse than other companies in 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 Lanvin Group Holdings. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Lanvin Group Holdings' 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.

As you can see, the covering analyst clearly isn't bullish, and there might be good reason for that. We've identified some potential issues with Lanvin Group Holdings' financials, such as a short cash runway. For more information, you can click here to discover this and the 2 other flags we've identified.

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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.