This Globus Maritime Limited (NASDAQ:GLBS) Analyst Is Way More Bearish Than They Used To Be

The latest analyst coverage could presage a bad day for Globus Maritime Limited (NASDAQ:GLBS), 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) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the consensus from sole analyst covering Globus Maritime is for revenues of US$50m in 2023, implying a stressful 31% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to nosedive 70% to US$0.54 in the same period. Before this latest update, the analyst had been forecasting revenues of US$58m and earnings per share (EPS) of US$1.32 in 2023. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Our analysis indicates that GLBS is potentially undervalued!

It'll come as no surprise then, to learn that the analyst has cut their price target 22% to US$3.50.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 26% by the end of 2023. This indicates a significant reduction from annual growth of 35% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 7.3% annually for the foreseeable future. The forecasts do look bearish for Globus Maritime, since they're expecting it to shrink faster than the 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 they also cut their revenue estimates for next year, and they expect sales to lag the wider market. That said, earnings per share are more important for creating value for shareholders. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of Globus Maritime.

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 Globus Maritime's business, like concerns around earnings quality. For more information, you can click here to discover this and the 2 other warning signs 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.