Ørsted A/S (CPH:ORSTED) Analysts Just Slashed This Year's Revenue Estimates By 1.5%

Market forces rained on the parade of Ørsted A/S (CPH:ORSTED) shareholders today, when the analysts downgraded their forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the 20 analysts covering Ørsted are now predicting revenues of kr.88b in 2024. If met, this would reflect a sizeable 21% improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of kr.22.04 per share this year. Prior to this update, the analysts had been forecasting revenues of kr.89b and earnings per share (EPS) of kr.23.07 in 2024. The forecasts seem to have become a little more negative on the business after the recent consensus updates, given the small dip in their earnings per share forecasts for this year.

See our latest analysis for Ørsted

It might be a surprise to learn that the consensus price target was broadly unchanged at kr.457, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ørsted's past performance and to peers in the same industry. The analysts are definitely expecting Ørsted's growth to accelerate, with the forecast 46% annualised growth to the end of 2024 ranking favourably alongside historical growth of 8.3% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Ørsted 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. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Ørsted's revenues are expected to perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Ørsted going forwards.

Worse, Ørsted is labouring under a substantial debt burden, which - if today's forecasts prove accurate - the forecast downgrade could potentially exacerbate. See why we're concerned about Ørsted's balance sheet by visiting our risks dashboard for free on our platform here.

We also provide an overview of the Ørsted Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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