One Rex International Holding Limited (SGX:5WH) Analyst Is Reducing Their Forecasts For This Year

One thing we could say about the covering analyst on Rex International Holding Limited (SGX:5WH) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

Following the latest downgrade, the one analyst covering Rex International Holding provided consensus estimates of US$148m revenue in 2022, which would reflect a small 6.7% decline on its sales over the past 12 months. Statutory earnings per share are supposed to decline 13% to US$0.045 in the same period. Previously, the analyst had been modelling revenues of US$200m and earnings per share (EPS) of US$0.063 in 2022. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Rex International Holding

It'll come as no surprise then, to learn that the analyst has cut their price target 22% to S$0.45.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 6.7% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 88% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 10% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Rex International Holding is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Rex International Holding. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Rex International Holding.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Rex International Holding going out as far as 2024, 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 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.