Time To Worry? Analysts Are Downgrading Their ACWA Power Company (TADAWUL:2082) Outlook

Today is shaping up negative for ACWA Power Company (TADAWUL:2082) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

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Following the downgrade, the current consensus from ACWA Power's five analysts is for revenues of ر.س7.3b in 2025 which - if met - would reflect a meaningful 16% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 28% to ر.س3.07. Before this latest update, the analysts had been forecasting revenues of ر.س8.8b and earnings per share (EPS) of ر.س3.50 in 2025. Indeed, we can see that the analysts are a lot more bearish about ACWA Power's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for ACWA Power

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. It's clear from the latest estimates that ACWA Power's rate of growth is expected to accelerate meaningfully, with the forecast 16% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 7.2% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that ACWA Power is expected to grow much faster than its industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for ACWA Power. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on ACWA Power, and a few readers might choose to steer clear of the stock.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for ACWA Power going out to 2027, 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.

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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.