Cause For Concern? One Analyst Thinks Awilco LNG ASA's (OB:ALNG) Revenues Are Under Threat

One thing we could say about the covering analyst on Awilco LNG ASA (OB:ALNG) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as the analyst signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the consensus from Awilco LNG's one analyst is for revenues of US$44m in 2025, which would reflect a painful 45% decline in sales compared to the last year of performance. Statutory earnings per share are presumed to drop to approximately break-even in the same period. Prior to this update, the analyst had been forecasting revenues of US$49m and earnings per share (EPS) of US$0.036 in 2025. Indeed, we can see that the analyst is a lot more bearish about Awilco LNG's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Awilco LNG

The consensus price target fell 35% to US$0.36, with the analyst clearly less optimistic about Awilco LNG's valuation following this update.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 38% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 18% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 5.4% annually for the foreseeable future. The forecasts do look bearish for Awilco LNG, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that Awilco LNG revenue is expected to perform worse than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. 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 Awilco LNG after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.