Today is shaping up negative for New Fortress Energy Inc. (NASDAQ:NFE) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following the downgrade, the most recent consensus for New Fortress Energy from its five analysts is for revenues of US$2.7b in 2024 which, if met, would be a satisfactory 7.5% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to decrease 5.9% to US$2.07 in the same period. Previously, the analysts had been modelling revenues of US$3.1b and earnings per share (EPS) of US$3.22 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.
The consensus price target fell 5.5% to US$38.67, with the weaker earnings outlook clearly leading analyst valuation estimates.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that New Fortress Energy's revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2024 being well below the historical 49% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.1% per year. So it's pretty clear that, while New Fortress Energy's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
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 New Fortress Energy. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better 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.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with New Fortress Energy's financials, such as concerns around earnings quality. Learn more, and discover the 1 other warning sign we've identified, 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.
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