Need To Know: This Analyst Just Made A Substantial Cut To Their Insteel Industries, Inc. (NYSE:IIIN) Estimates

The latest analyst coverage could presage a bad day for Insteel Industries, Inc. (NYSE:IIIN), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

After the downgrade, the consensus from Insteel Industries' single analyst is for revenues of US$590m in 2024, which would reflect a definite 9.0% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to nosedive 26% to US$1.24 in the same period. Before this latest update, the analyst had been forecasting revenues of US$689m and earnings per share (EPS) of US$3.18 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Insteel Industries

It'll come as no surprise then, to learn that the analyst has cut their price target 5.1% to US$37.00.

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 9.0% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 13% 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 3.9% annually for the foreseeable future. It's pretty clear that Insteel Industries' revenues are expected to perform substantially worse than the wider 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. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Insteel Industries' revenues are expected to grow 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 Insteel Industries.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Insteel Industries going out as far as 2025, and you can see them 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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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.