New Forecasts: Here's What Analysts Think The Future Holds For Odfjell SE (OB:ODF)

Odfjell SE (OB:ODF) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Odfjell will make substantially more sales than they'd previously expected.

After this upgrade, Odfjell's four analysts are now forecasting revenues of US$1.0b in 2021. This would be a notable 8.4% improvement in sales compared to the last 12 months. Following this this upgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of US$0.35 per share in 2021. Yet before this consensus update, the analysts had been forecasting revenues of US$900m and losses of US$0.24 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analysts significantly increasing their revenue forecasts while also expecting losses per share to increase. It looks like the revenue growth will not be achieved without incremental costs.

View our latest analysis for Odfjell

The consensus price target stayed unchanged at US$4.31, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation. 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 Odfjell at US$39.84 per share, while the most bearish prices it at US$36.19. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Odfjell's growth to accelerate, with the forecast 18% annualised growth to the end of 2021 ranking favourably alongside historical growth of 1.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Odfjell is expected to grow much faster than its 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 Odfjell. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Odfjell.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Odfjell analysts - going out to 2023, 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 upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.
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