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The latest analyst coverage could presage a bad day for Globus Maritime Limited (NASDAQ:GLBS), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.
Following the downgrade, the consensus from solo analyst covering Globus Maritime is for revenues of US$50m in 2023, implying a disturbing 31% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to plummet 70% to US$0.54 in the same period. Before this latest update, the analyst had been forecasting revenues of US$58m and earnings per share (EPS) of US$1.32 in 2023. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.
See our latest analysis for Globus Maritime
The consensus price target fell 22% to US$3.50, with the weaker earnings outlook clearly leading analyst valuation estimates.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 26% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 35% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 7.3% annually for the foreseeable future. So it's pretty clear that Globus Maritime's revenues are expected to shrink faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that Globus Maritime revenue is expected to perform worse 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.
After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Globus Maritime's business, like concerns around earnings quality. Learn more, and discover the 2 other warning signs we've identified, for free on our platform here.
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