Borr Drilling Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

The second-quarter results for Borr Drilling Limited (OB:BORR) were released last week, making it a good time to revisit its performance. It looks like a pretty bad result, all things considered. Although revenues of US$272m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 27% to hit US$0.12 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Borr Drilling

Taking into account the latest results, the current consensus from Borr Drilling's six analysts is for revenues of US$1.02b in 2024. This would reflect a notable 11% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 83% to US$0.55. In the lead-up to this report, the analysts had been modelling revenues of US$976.8m and earnings per share (EPS) of US$0.64 in 2024. While next year's revenue estimates increased, there was also a real cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

The consensus price target was unchanged at kr86.23, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. 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. The most optimistic Borr Drilling analyst has a price target of kr98.43 per share, while the most pessimistic values it at kr72.32. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 24% growth on an annualised basis. That is in line with its 25% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 11% per year. So it's pretty clear that Borr Drilling is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Borr Drilling. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Borr Drilling. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Borr Drilling going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Borr Drilling (1 is significant!) that we have uncovered.

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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.