2020 Bulkers Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Last week saw the newest quarterly earnings release from 2020 Bulkers Ltd. (OB:2020), an important milestone in the company's journey to build a stronger business. It looks like a pretty bad result, all things considered. Although revenues of US$9.0m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 59% to hit US$0.01 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Following the recent earnings report, the consensus from five analysts covering 2020 Bulkers is for revenues of US$59.9m in 2025. This implies a stressful 28% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to nosedive 47% to US$1.11 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$60.0m and earnings per share (EPS) of US$1.12 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

See our latest analysis for 2020 Bulkers

There were no changes to revenue or earnings estimates or the price target of kr145, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values 2020 Bulkers at kr162 per share, while the most bearish prices it at kr116. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. 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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 35% by the end of 2025. This indicates a significant reduction from annual growth of 16% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 1.8% per year. So it's pretty clear that 2020 Bulkers' revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also made no changes to their revenue estimates, implying the business is not expected to experience any major impacts to the current trajectory in the near term, even though it is expected to trail the wider industry. The consensus price target held steady at kr145, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on 2020 Bulkers. Long-term earnings power is much more important than next year's profits. We have forecasts for 2020 Bulkers going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for 2020 Bulkers (1 is a bit unpleasant!) that you should be aware of.

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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.