Today is shaping up negative for Industrias Bachoco, S.A.B. de C.V. (NYSE:IBA) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

After the downgrade, the seven analysts covering Industrias Bachoco. de are now predicting revenues of Mex$74b in 2020. If met, this would reflect a major 21% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 30% to Mex$81.94. Prior to this update, the analysts had been forecasting revenues of Mex$84b and earnings per share (EPS) of Mex$92.52 in 2020. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a considerable drop in earnings per share numbers as well.

See our latest analysis for Industrias Bachoco. de

The consensus price target fell 11% to US$50.00, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. The analysts are definitely expecting Industrias Bachoco. de'sgrowth to accelerate, with the forecast 21% growth ranking favourably alongside historical growth of 8.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 2.3% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Industrias Bachoco. de to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Industrias Bachoco. de.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Industrias Bachoco. de analysts - going out to 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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