Analyst Forecasts Just Got A Lot More Bearish On Babcock & Wilcox Enterprises, Inc. (NYSE:BW)
Today is shaping up negative for Babcock & Wilcox Enterprises, Inc. (NYSE:BW) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the downgrade, the consensus from four analysts covering Babcock & Wilcox Enterprises is for revenues of US$979m in 2024, implying a discernible 6.8% decline in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 97% to US$0.015. Previously, the analysts had been modelling revenues of US$1.2b and earnings per share (EPS) of US$0.16 in 2024. So we can see that the consensus has become notably more bearish on Babcock & Wilcox Enterprises' outlook with these numbers, making a substantial drop in next year's revenue estimates. Furthermore, they expect the business to be loss-making next year, compared to their previous forecasts of a profit.
Check out our latest analysis for Babcock & Wilcox Enterprises
The consensus price target fell 41% to US$5.75, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.
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 Babcock & Wilcox Enterprises' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 5.5% to the end of 2024. This tops off a historical decline of 2.4% 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 grow 8.2% annually. So while a broad number of companies are forecast to grow, unfortunately Babcock & Wilcox Enterprises is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The biggest low-light for us was that the forecasts for Babcock & Wilcox Enterprises dropped from profits to a loss next year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Babcock & Wilcox Enterprises' revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Babcock & Wilcox Enterprises.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Babcock & Wilcox Enterprises analysts - 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.
