The latest analyst coverage could presage a bad day for Babcock & Wilcox Enterprises, Inc. (NYSE:BW), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After the downgrade, the consensus from Babcock & Wilcox Enterprises' four analysts is for revenues of US$838m in 2025, which would reflect a discernible 4.6% decline in sales compared to the last year of performance. The losses are expected to disappear over the next year or so, with forecasts for a profit of US$0.20 per share next year. Previously, the analysts had been modelling revenues of US$990m and earnings per share (EPS) of US$0.53 in 2025. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Babcock & Wilcox Enterprises

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Babcock & Wilcox Enterprises' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 3.7% by the end of 2025. This indicates a significant reduction from annual growth of 6.9% 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 8.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Babcock & Wilcox Enterprises is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the serious cut to next year's outlook, it's clear that analysts have turned more bearish on Babcock & Wilcox Enterprises, and we wouldn't blame shareholders for feeling a little more cautious themselves.

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 Babcock & Wilcox Enterprises' business, like dilutive stock issuance over the past year. For more information, you can click here to discover this and the 3 other risks we've identified.

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.

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