Today is shaping up negative for SBM Offshore N.V. (AMS:SBMO) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business. Investors however, have been notably more optimistic about SBM Offshore recently, with the stock price up a notable 14% to €20.54 in the past week. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.

Following the downgrade, the consensus from four analysts covering SBM Offshore is for revenues of US$4.0b in 2025, implying a chunky 15% decline in sales compared to the last 12 months. Per-share earnings are expected to bounce 48% to US$1.27. Previously, the analysts had been modelling revenues of US$4.9b and earnings per share (EPS) of US$1.61 in 2025. Indeed, we can see that the analysts are a lot more bearish about SBM Offshore's prospects, administering a measurable cut to revenue estimates and slashing their 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$25.44 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on SBM Offshore, with the most bullish analyst valuing it at US$26.26 and the most bearish at US$23.21 per share. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

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. We would highlight that sales are expected to reverse, with a forecast 15% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 9.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.9% per year. It's pretty clear that SBM Offshore's revenues are expected to perform substantially worse 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that SBM Offshore's revenues are expected to grow slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of SBM Offshore.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with SBM Offshore's financials, such as its declining profit margins. Learn more, and discover the 3 other flags we've identified, for 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.