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SBM Offshore N.V. (AMS:SBMO) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. The stock price has risen 5.5% to €12.48 over the past week, suggesting investors are becoming more optimistic. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
Following the latest upgrade, the four analysts covering SBM Offshore provided consensus estimates of US$4.1b revenue in 2023, which would reflect an uneasy 18% decline on its sales over the past 12 months. Statutory earnings per share are forecast to be US$1.82, approximately in line with the last 12 months. Prior to this update, the analysts had been forecasting revenues of US$3.4b and earnings per share (EPS) of US$0.81 in 2023. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
Check out our latest analysis for SBM Offshore
Despite these upgrades, the analysts have not made any major changes to their price target of US$20.61, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values SBM Offshore at US$26.77 per share, while the most bearish prices it at US$16.90. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await SBM Offshore shareholders.
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 sales are expected to reverse, with a forecast 32% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 16% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.0% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - SBM Offshore is expected to lag the wider industry.