The analyst reports Shelf Drilling (North Sea), Ltd. (OB:SDNS) has delivered a dose of negativity to its shareholders today by significantly revising its statutory forecasts for this year. Revenue and earnings per share (EPS) estimates were both revised downward, and the analyst saw dark clouds on the horizon.
Following the downgrade, the current consensus from Shelf Drilling (North Sea)’s sole analyst is for revenues of $145 million in 2024, which – if achieved – would represent a significant 27% increase in sales over the past 12 months. Losses per share are expected to explode, reaching $0.61 per share. However, prior to this consensus update, the analyst had been forecasting revenues of $173 million and losses of $0.32 per share in 2024. So there has been a clear shift in sentiment, as the analyst has significantly lowered his revenue estimates for this year while increasing his loss per share forecasts.
Check out our latest analysis on shelf drilling (North Sea).
The consensus price target fell 11% to NOK 40.00, implying that lower earnings per share are a leading indicator for Shelf Drilling (North Sea)’s valuation.
We can also look at these estimates in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether the forecasts are more or less optimistic compared to other companies in the industry. We want to highlight that Shelf Drilling (North Sea)’s revenue growth is expected to slow down. The forecast annualized growth rate of 37% by the end of 2024 is well below the historical growth of 80% last year. Compare this to the other companies in the industry with analyst reports forecast to grow revenues by (overall) 11% per year. Even after the forecast growth slowdown, it seems obvious that Shelf Drilling (North Sea) is also expected to grow faster than the industry as a whole.
The conclusion
The most important thing to note about this downgrade is that the consensus has increased its loss forecast for this year, suggesting that all may not be well at Shelf Drilling (North Sea). Unfortunately, the analyst also lowered its revenue estimates, although our data suggests that revenues are expected to be better than the broader market. Given the magnitude of the downgrades, it would not be surprising to see the market become more cautious on the company.
Nevertheless, the long-term development of the company is much more important for the value creation of shareholders. We have analyst estimates for Shelf Drilling (North Sea) up to 2026, which you can view free of charge here on our platform.
Of course, you can see the company management invest large sums in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also want to free List of stocks with high insider ownership.
New: Manage all your stock portfolios in one place
We have the the ultimate portfolio companion for stock investors, and it’s free.
• Connect an unlimited number of portfolios and see your total amount in one currency
• Be notified of new warning signals or risks by email or mobile phone
• Track the fair value of your stocks
Try a demo portfolio for free
Do you have feedback on this article? Are you concerned about the content? Contact us directly from us. Alternatively, send an email to editorial-team (at) simplywallst.com.
This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.
