Revenue Downgrade: Here's What Analysts Forecast For Belships ASA (OB:BELCO)

One thing we could say about the analysts on Belships ASA (OB:BELCO) - 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 analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the consensus from Belships' four analysts is for revenues of US$416m in 2024, which would reflect a noticeable 3.2% decline in sales compared to the last year of performance. Per-share earnings are expected to accumulate 4.8% to US$0.25. Before this latest update, the analysts had been forecasting revenues of US$488m and earnings per share (EPS) of US$0.27 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a minor downgrade to EPS estimates to boot.

Check out our latest analysis for Belships

Analysts made no major changes to their price target of US$2.87, suggesting the downgrades are not expected to have a long-term impact on Belships' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Belships, with the most bullish analyst valuing it at US$3.05 and the most bearish at US$2.77 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

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 6.3% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 31% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 0.09% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Belships is expected to lag 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Belships' revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Belships going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Belships analysts - going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.