Time To Worry? Analysts Just Downgraded Their Riverstone Holdings Limited (SGX:AP4) Outlook

The latest analyst coverage could presage a bad day for Riverstone Holdings Limited (SGX:AP4), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the most recent consensus for Riverstone Holdings from its five analysts is for revenues of RM2.7b in 2021 which, if met, would be a huge 46% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of RM2.6b in 2021. It looks like the recent earnings updates confirmed that the business is performing in line with expectations, given there's been no meaningful changes in the new revenue estimates.

See our latest analysis for Riverstone Holdings

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Riverstone Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 46% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 19% 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 15% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Riverstone Holdings to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts reconfirmed their revenue estimates for this year, suggesting that the business is performing in line with market expectations. Analysts also expect revenues to grow faster than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Riverstone Holdings after today.

Thirsting for more data? At least one of Riverstone Holdings' five analysts has provided estimates out to 2023, which can be seen for 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 that insiders are buying.

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