Time To Worry? Analysts Just Downgraded Their Fertiglobe plc (ADX:FERTIGLB) Outlook

May 20, 2022
  •  Updated
June 03, 2022
ADX:FERTIGLB
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Today is shaping up negative for Fertiglobe plc (ADX:FERTIGLB) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. The stock price has risen 5.1% to د.إ5.37 over the past week. 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 downgrade, the most recent consensus for Fertiglobe from its nine analysts is for revenues of US$4.4b in 2022 which, if met, would be a notable 10% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$5.0b in 2022. The consensus view seems to have become more pessimistic on Fertiglobe, noting the measurable cut to revenue estimates in this update.

See our latest analysis for Fertiglobe

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ADX:FERTIGLB Earnings and Revenue Growth May 20th 2022

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Fertiglobe's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 14% growth on an annualised basis. This is compared to a historical growth rate of 129% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% per year. So it's pretty clear that, while Fertiglobe's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Fertiglobe this year. They're also forecasting more rapid revenue growth than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Fertiglobe after today.

Unsatisfied? At least one of Fertiglobe's nine analysts has provided estimates out to 2024, which can be seen for 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.

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