Market forces rained on the parade of SBM Offshore N.V. (AMS:SBMO) shareholders today, when the analysts downgraded their forecasts for next year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the latest consensus from SBM Offshore's four analysts is for revenues of US$4.9b in 2025, which would reflect a modest 3.4% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to dive 24% to US$1.84 in the same period. Before this latest update, the analysts had been forecasting revenues of US$5.8b and earnings per share (EPS) of US$1.90 in 2025. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a minor downgrade to EPS estimates to boot.

See our latest analysis for SBM Offshore

Despite the cuts to forecast earnings, there was no real change to the US$25.23 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic SBM Offshore analyst has a price target of US$26.44 per share, while the most pessimistic values it at US$23.21. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting SBM Offshore is an easy business to forecast or the underlying assumptions are obvious.

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. It's pretty clear that there is an expectation that SBM Offshore's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.7% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.0% per year. Even after the forecast slowdown in growth, it seems obvious that SBM Offshore is also expected to grow faster than the wider 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 SBM Offshore. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of SBM Offshore going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for SBM Offshore going out to 2026, 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 with high insider ownership.

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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.