GrafTech International Ltd. (NYSE:EAF) Analysts Are Reducing Their Forecasts For Next Year

Today is shaping up negative for GrafTech International Ltd. (NYSE:EAF) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the latest downgrade, GrafTech International's four analysts currently expect revenues in 2024 to be US$716m, approximately in line with the last 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of US$0.012 per share in 2024. Before this latest update, the analysts had been forecasting revenues of US$862m and earnings per share (EPS) of US$0.30 in 2024. There looks to have been a major change in sentiment regarding GrafTech International's prospects, with a measurable cut to revenues and the analysts now forecasting a loss instead of a profit.

View our latest analysis for GrafTech International

The consensus price target fell 13% to US$3.50, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would also point out that the forecast 1.6% annualised revenue decline to the end of 2024 is better than the historical trend, which saw revenues shrink 13% annually 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 8.6% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect GrafTech International to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts are expecting GrafTech International to become unprofitable next year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that GrafTech International's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of GrafTech International.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with GrafTech International, including its declining profit margins. Learn more, and discover the 1 other flag we've identified, for free on our platform here.

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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.