Bearish: Analysts Just Cut Their Abu Dhabi Ports Company PJSC (ADX:ADPORTS) Revenue and EPS estimates

Market forces rained on the parade of Abu Dhabi Ports Company PJSC (ADX:ADPORTS) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business. Shares are up 5.8% to د.إ6.22 in the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the downgrade, the most recent consensus for Abu Dhabi Ports Company PJSC from its twin analysts is for revenues of د.إ6.6b in 2023 which, if met, would be a solid 19% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to drop 16% to د.إ0.21 in the same period. Prior to this update, the analysts had been forecasting revenues of د.إ9.2b and earnings per share (EPS) of د.إ0.30 in 2023. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a pretty serious decline to earnings per share numbers as well.

See our latest analysis for Abu Dhabi Ports Company PJSC

Analysts made no major changes to their price target of د.إ7.41, suggesting the downgrades are not expected to have a long-term impact on Abu Dhabi Ports Company PJSC's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Abu Dhabi Ports Company PJSC, with the most bullish analyst valuing it at د.إ8.00 and the most bearish at د.إ6.84 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

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. We can infer from the latest estimates that forecasts expect a continuation of Abu Dhabi Ports Company PJSC'shistorical trends, as the 19% annualised revenue growth to the end of 2023 is roughly in line with the 20% annual revenue growth over the past three years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 16% per year. So although Abu Dhabi Ports Company PJSC is expected to maintain its revenue growth rate, it's only growing at about the rate of 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. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Abu Dhabi Ports Company PJSC after the downgrade.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Abu Dhabi Ports Company PJSC going out as far as 2025, 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.

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