Need To Know: The Consensus Just Cut Its W&T Offshore, Inc. (NYSE:WTI) Estimates For 2023

Today is shaping up negative for W&T Offshore, Inc. (NYSE:WTI) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Shares are up 4.4% to US$4.28 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the downgrade, the consensus from three analysts covering W&T Offshore is for revenues of US$573m in 2023, implying a stressful 33% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to dive 79% to US$0.37 in the same period. Prior to this update, the analysts had been forecasting revenues of US$650m and earnings per share (EPS) of US$0.93 in 2023. Indeed, we can see that the analysts are a lot more bearish about W&T Offshore's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for W&T Offshore

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 42% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 9.7% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 5.3% per year. So it's pretty clear that W&T Offshore's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that W&T Offshore revenue is expected to perform worse than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of W&T Offshore going forwards.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with W&T Offshore's financials, such as dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other warning signs we've identified.

You can also see our analysis of W&T Offshore's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.