Market forces rained on the parade of Scorpio Tankers Inc. (NYSE:STNG) shareholders today, when the analysts downgraded their forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, the nine analysts covering Scorpio Tankers provided consensus estimates of US$937m revenue in 2025, which would reflect a substantial 25% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to plunge 60% to US$5.77 in the same period. Previously, the analysts had been modelling revenues of US$1.0b and earnings per share (EPS) of US$6.06 in 2025. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a small dip in earnings per share numbers as well.

See our latest analysis for Scorpio Tankers

Despite the cuts to forecast earnings, there was no real change to the US$70.45 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 25% annualised revenue decline to the end of 2025. 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 4.5% annually for the foreseeable future. It's pretty clear that Scorpio Tankers' 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 Scorpio Tankers. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Scorpio Tankers after today.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Scorpio Tankers analysts - going out to 2027, and you can see them 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.

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