Downgrade: Here's How Analysts See SNDL Inc. (NASDAQ:SNDL) Performing In The Near Term

The latest analyst coverage could presage a bad day for SNDL Inc. (NASDAQ:SNDL), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

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After the downgrade, the consensus from SNDL's dual analysts is for revenues of CA$814m in 2027, which would reflect a definite 12% decline in sales compared to the last year of performance. Losses are expected to turn into profits real soon, with the analysts forecasting CA$0.02 in per-share earnings. Prior to this update, the analysts had been forecasting revenues of CA$925m and earnings per share (EPS) of CA$0.11 in 2027. Indeed, we can see that the analysts are a lot more bearish about SNDL's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for SNDL

It'll come as no surprise then, to learn that the analysts have cut their price target 7.4% to CA$4.57. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic SNDL analyst has a price target of CA$4.92 per share, while the most pessimistic values it at CA$4.21. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 9.5% by the end of 2027. This indicates a significant reduction from annual growth of 23% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - SNDL is expected to lag 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales 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.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for SNDL going out as far as 2028, and you can see them free on our platform here.

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