Norbit ASA (OB: NORBIT) shareholders are probably feeling a little disappointed since its shares fell 5.3% to kr14.40 in the week after its latest first-quarter results. It was an okay report, and revenues came in at kr152m, approximately in line with analyst estimates leading up to the results announcement. Following the result, the analyst has updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.
View our latest analysis for Norbit Taking into account the latest results, the current consensus, from the solitary analyst covering Norbit, is for revenues of kr555.6m in 2020, which would reflect a not inconsiderable 15% reduction in Norbit's sales over the past 12 months. Statutory earnings per share are expected to nosedive 83% to kr0.15 in the same period. Before this earnings report, the analyst had been forecasting revenues of kr741.5m and earnings per share (EPS) of kr1.83 in 2020.
Indeed, we can see that the analyst is a lot more bearish about Norbit's prospects following the latest results, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot. The consensus price target fell 26% to kr20.00, with the weaker earnings outlook clearly leading valuation estimates. 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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 15%, a significant reduction from annual growth of 29% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.1% annually for the foreseeable future.
It's pretty clear that Norbit's revenues are expected to perform substantially worse than the wider industry. The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Norbit. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here. That said, it's still necessary to consider the ever-present specter of investment risk. We've identified 4 warning signs with Norbit (at least 1 which is significant) , and understanding these should be part of your investment process.