These Analysts Think Tutor Perini Corporation's (NYSE:TPC) Earnings Are Under Threat

Market forces rained on the parade of Tutor Perini Corporation (NYSE:TPC) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the current consensus, from the three analysts covering Tutor Perini, is for revenues of US$3.7b in 2022, which would reflect an uncomfortable 8.7% reduction in Tutor Perini's sales over the past 12 months. Per-share losses are expected to explode, reaching US$1.46 per share. Before this latest update, the analysts had been forecasting revenues of US$4.4b and earnings per share (EPS) of US$1.13 in 2022. There looks to have been a major change in sentiment regarding Tutor Perini's prospects, with a measurable cut to revenues and the analysts now forecasting a loss instead of a profit.

See our latest analysis for Tutor Perini

The consensus price target fell 13% to US$11.33, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Tutor Perini analyst has a price target of US$14.00 per share, while the most pessimistic values it at US$9.00. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 17% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 0.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.7% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Tutor Perini is expected to lag the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Tutor Perini dropped from profits to a loss this 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.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Tutor Perini's business, like recent substantial insider selling. For more information, you can click here to discover this and the 1 other risk we've identified.

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.

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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.