Analysts Just Made A Major Revision To Their Genco Shipping & Trading Limited (NYSE:GNK) Revenue Forecasts
Market forces rained on the parade of Genco Shipping & Trading Limited (NYSE:GNK) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the latest downgrade, the current consensus, from the seven analysts covering Genco Shipping & Trading, is for revenues of US$232m in 2023, which would reflect a stressful 48% reduction in Genco Shipping & Trading's sales over the past 12 months. Statutory earnings per share are supposed to crater 31% to US$1.35 in the same period. Prior to this update, the analysts had been forecasting revenues of US$259m and earnings per share (EPS) of US$1.49 in 2023. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a small dip in EPS estimates to boot.
View our latest analysis for Genco Shipping & Trading
Analysts made no major changes to their price target of US$23.03, suggesting the downgrades are not expected to have a long-term impact on Genco Shipping & Trading's valuation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 73% by the end of 2023. This indicates a significant reduction from annual growth of 11% 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 4.1% annually for the foreseeable future. So it's pretty clear that Genco Shipping & Trading's revenues are expected to shrink faster than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Genco Shipping & Trading. Unfortunately they also cut their revenue estimates for this year, and they expect sales to lag the wider market. That said, earnings per share are more important for creating value for shareholders. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Genco Shipping & Trading after today.
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 Genco Shipping & Trading going out to 2025, and you can see them free on our platform here.
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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.
