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The analysts covering W&T Offshore, Inc. (NYSE:WTI) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. At US$4.29, shares are up 4.4% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.
After the downgrade, the consensus from W&T Offshore's three analysts is for revenues of US$573m in 2023, which would reflect a disturbing 33% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to dive 79% to US$0.37 in the same period. Previously, the analysts had been modelling revenues of US$650m and earnings per share (EPS) of US$0.93 in 2023. Indeed, we can see that the analysts are a lot more bearish about W&T Offshore's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
Check out our latest analysis for W&T Offshore
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 42% by the end of 2023. This indicates a significant reduction from annual growth of 9.7% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 4.4% per year. The forecasts do look bearish for W&T Offshore, since they're expecting it to shrink faster than the industry.
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 W&T Offshore. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that W&T Offshore revenue is expected to perform worse than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on W&T Offshore, and we wouldn't blame shareholders for feeling a little more cautious themselves.
There might be good reason for analyst bearishness towards W&T Offshore, like a weak balance sheet. For more information, you can click here to discover this and the 2 other concerns we've identified.