Stock Analysis

Analyst Forecasts Just Got A Lot More Bearish On Babcock & Wilcox Enterprises, Inc. (NYSE:BW)

Source: Shutterstock

Market forces rained on the parade of Babcock & Wilcox Enterprises, Inc. (NYSE:BW) shareholders today, when the analysts downgraded their forecasts for next year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the latest downgrade, the current consensus, from the four analysts covering Babcock & Wilcox Enterprises, is for revenues of US$979m in 2024, which would reflect a perceptible 6.8% reduction in Babcock & Wilcox Enterprises' sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 97% to US$0.015. Prior to this update, the analysts had been forecasting revenues of US$1.2b and earnings per share (EPS) of US$0.16 in 2024. There looks to have been a major change in sentiment regarding Babcock & Wilcox Enterprises' prospects, with a substantial drop in revenues and the analysts now forecasting a loss instead of a profit.

Check out our latest analysis for Babcock & Wilcox Enterprises

NYSE:BW Earnings and Revenue Growth November 15th 2023

The consensus price target fell 41% to US$5.75, implicitly signalling that lower earnings per share are a leading indicator for Babcock & Wilcox Enterprises' valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One more thing stood out to us about these estimates, and it's the idea that Babcock & Wilcox Enterprises' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 5.5% to the end of 2024. This tops off a historical decline of 2.4% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 8.2% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Babcock & Wilcox Enterprises to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts are expecting Babcock & Wilcox Enterprises to become unprofitable next year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

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 Babcock & Wilcox Enterprises analysts - going out to 2025, 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.

Valuation is complex, but we're helping make it simple.

Find out whether Babcock & Wilcox Enterprises is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at)

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.