One thing we could say about the analysts on Babcock & Wilcox Enterprises, Inc. (NYSE:BW) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.
Following the downgrade, the consensus from four analysts covering Babcock & Wilcox Enterprises is for revenues of US$979m in 2024, implying a measurable 6.8% decline in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 97% to US$0.015 per share. Previously, the analysts had been modelling revenues of US$1.2b and earnings per share (EPS) of US$0.16 in 2024. There looks to have been a major change in sentiment regarding Babcock & Wilcox Enterprises' prospects, with a substantial drop in revenues and the analysts now forecasting a loss instead of a profit.
View 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.
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. Over the past five years, revenues have declined around 2.4% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 5.5% decline in revenue until the end of 2024. 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 it's pretty clear that, while it does have declining revenues, the analysts also expect Babcock & Wilcox Enterprises to suffer worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts are expecting Babcock & Wilcox Enterprises to become unprofitable 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. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Babcock & Wilcox Enterprises.
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 Babcock & Wilcox Enterprises going out to 2025, and you can see them 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.
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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.