Eneti Inc. (NYSE:NETI) Analysts Just Cut Their EPS Forecasts

The latest analyst coverage could presage a bad day for Eneti Inc. (NYSE:NETI), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon. Shares are up 8.2% to US$10.60 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 latest downgrade, the five analysts covering Eneti provided consensus estimates of US$133m revenue in 2023, which would reflect a concerning 33% decline on its sales over the past 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of US$0.56 per share in 2023. Prior to this update, the analysts had been forecasting revenues of US$150m and earnings per share (EPS) of US$0.39 in 2023. So we can see that the consensus has become notably more bearish on Eneti's outlook with these numbers, making a measurable cut to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

View our latest analysis for Eneti

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. One more thing stood out to us about these estimates, and it's the idea that Eneti's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 33% to the end of 2023. This tops off a historical decline of 7.0% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to decline 8.0% annually. While this is interesting, Eneti's, revenues are still expected to shrink next year, and at a faster rate than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Eneti dropped from profits to a loss this year. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that Eneti revenue is expected to perform worse than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Eneti, and a few readers might choose to steer clear of the stock.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Eneti going out to 2025, and you can see them free on our platform here.

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.