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The latest analyst coverage could presage a bad day for Grindrod Shipping Holdings Ltd. (NASDAQ:GRIN), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.
Following the latest downgrade, Grindrod Shipping Holdings' dual analysts currently expect revenues in 2020 to be US$326m, approximately in line with the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$389m in 2020. It looks like forecasts have become a fair bit less optimistic on Grindrod Shipping Holdings, given the measurable cut to revenue estimates.
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. We would also point out that the forecast 1.5% revenue decline is better than the historical trend, which saw revenues shrink -6.8% annually over the past three years
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. 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 Grindrod Shipping Holdings after today.
There might be good reason for analyst bearishness towards Grindrod Shipping Holdings, like a short cash runway. Learn more, and discover the 2 other flags we've identified, for 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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