Market forces rained on the parade of Star Bulk Carriers Corp. (NASDAQ:SBLK) shareholders today, when the analysts downgraded their forecasts for next year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the latest downgrade, the current consensus, from the four analysts covering Star Bulk Carriers, is for revenues of US$889m in 2025, which would reflect a painful 27% reduction in Star Bulk Carriers' sales over the past 12 months. Statutory earnings per share are supposed to dive 44% to US$1.44 in the same period. Previously, the analysts had been modelling revenues of US$995m and earnings per share (EPS) of US$2.23 in 2025. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

View our latest analysis for Star Bulk Carriers

The consensus price target fell 7.0% to US$22.84, with the weaker earnings outlook clearly leading analyst valuation estimates.

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 22% by the end of 2025. This indicates a significant reduction from annual growth of 8.6% 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 1.6% annually for the foreseeable future. So it's pretty clear that Star Bulk Carriers' revenues are expected to shrink 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 Star Bulk Carriers. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that Star Bulk Carriers 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.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Star Bulk Carriers, including major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 1 other concern we've identified.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.