One First Sponsor Group Limited (SGX:ADN) Analyst Is Reducing Their Forecasts For This Year

One thing we could say about the covering analyst on First Sponsor Group Limited (SGX:ADN) - 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 downgrade, the current consensus from First Sponsor Group's solitary analyst is for revenues of S$278m in 2021 which - if met - would reflect a huge 37% increase on its sales over the past 12 months. Statutory earnings per share are supposed to sink 15% to S$0.10 in the same period. Previously, the analyst had been modelling revenues of S$574m and earnings per share (EPS) of S$0.16 in 2021. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for First Sponsor Group

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. The analyst is definitely expecting First Sponsor Group's growth to accelerate, with the forecast 37% annualised growth to the end of 2021 ranking favourably alongside historical growth of 4.2% per annum 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 5.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that First Sponsor Group is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the serious cut to this year's outlook, it's clear that the analyst has turned more bearish on First Sponsor Group, and we wouldn't blame shareholders for feeling a little more cautious themselves.

Worse, First Sponsor Group is labouring under a substantial debt burden, which - if today's forecasts prove accurate - the forecast downgrade could potentially exacerbate. You can learn more about our debt analysis for free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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