These Analysts Just Made An Incredible Downgrade To Their Ingevity Corporation (NYSE:NGVT) EPS Forecasts

The latest analyst coverage could presage a bad day for Ingevity Corporation (NYSE:NGVT), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the seven analysts covering Ingevity provided consensus estimates of US$1.6b revenue in 2024, which would reflect a not inconsiderable 8.7% decline on its sales over the past 12 months. Statutory earnings per share are expected to be US$3.49, roughly flat on the last 12 months. Previously, the analysts had been modelling revenues of US$1.8b and earnings per share (EPS) of US$5.21 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

See our latest analysis for Ingevity

It'll come as no surprise then, to learn that the analysts have cut their price target 8.9% to US$53.29.

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 7.0% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 8.9% 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 4.3% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Ingevity is expected to lag 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 analysts also downgraded their revenue estimates, and industry data suggests that Ingevity's revenues are expected to grow slower than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Ingevity.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Ingevity, including its declining profit margins. Learn more, and discover the 2 other concerns we've identified, for 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.