This Shelf Drilling (North Sea), Ltd. (OB:SDNS) Analyst Is Way More Bearish Than They Used To Be

The analyst covering Shelf Drilling (North Sea), Ltd. (OB:SDNS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

Following the downgrade, the current consensus from Shelf Drilling (North Sea)'s single analyst is for revenues of US$145m in 2024 which - if met - would reflect a major 27% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.61 per share. Yet before this consensus update, the analyst had been forecasting revenues of US$173m and losses of US$0.32 per share in 2024. Ergo, there's been a clear change in sentiment, with the analyst administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

See our latest analysis for Shelf Drilling (North Sea)

The consensus price target fell 11% to kr40.00, implicitly signalling that lower earnings per share are a leading indicator for Shelf Drilling (North Sea)'s valuation.

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 would highlight that Shelf Drilling (North Sea)'s revenue growth is expected to slow, with the forecast 37% annualised growth rate until the end of 2024 being well below the historical 80% growth over the last 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. Even after the forecast slowdown in growth, it seems obvious that Shelf Drilling (North Sea) is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Shelf Drilling (North Sea). Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Shelf Drilling (North Sea) going out as far as 2026, and you can see them 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.