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Some Bassett Furniture Industries, Incorporated (NASDAQ:BSET) Analysts Just Made A Major Cut To Next Year's Estimates

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Simply Wall St
·3 min read
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The analysts covering Bassett Furniture Industries, Incorporated (NASDAQ:BSET) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

After the downgrade, the consensus from Bassett Furniture Industries' two analysts is for revenues of US$329m in 2020, which would reflect a stressful 27% decline in sales compared to the last year of performance. Per-share losses are expected to explode, reaching US$0.46 per share. Prior to this update, the analysts had been forecasting revenues of US$440m and earnings per share (EPS) of US$0.50 in 2020. So we can see that the consensus has become notably more bearish on Bassett Furniture Industries' outlook with these numbers, making a sizeable 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.

Check out our latest analysis for Bassett Furniture Industries

NasdaqGS:BSET Past and Future Earnings April 4th 2020
NasdaqGS:BSET Past and Future Earnings April 4th 2020

The consensus price target fell 48% to US$7.50, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Bassett Furniture Industries, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$5.00 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 27% revenue decline a notable change from historical growth of 4.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Bassett Furniture Industries is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts are expecting Bassett Furniture Industries to become unprofitable this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2021, which can be seen 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.