Yahoo Finance Shorn Like A Sheep: Analysts Just Shaved Their Bonavista Energy Corporation (TSE:BNP) Forecasts Dramatically
Market forces rained on the parade of Bonavista Energy Corporation (TSE:BNP) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, the three analysts covering Bonavista Energy provided consensus estimates of CA$295m revenue in 2020, which would reflect a sizeable 28% decline on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 37% to CA$1.92. Yet prior to the latest estimates, the analysts had been forecasting revenues of CA$399m and losses of CA$0.25 per share in 2020. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
View our latest analysis for Bonavista Energy
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One more thing stood out to us about these estimates, and it's the idea that Bonavista Energy'sdecline is expected to accelerate, with revenues forecast to fall 28% next year, topping off a historical decline of 10% a year over the past five years. Compare this against analyst estimates for companies in the wider industry, which suggest that revenues (in aggregate) are expected to grow 6.2% next year. So while a broad number of companies are forecast to decline, unfortunately Bonavista Energy is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Bonavista Energy's revenues are expected to grow slower than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Bonavista Energy, and we wouldn't blame shareholders for feeling a little more cautious themselves.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Bonavista Energy analysts - going out to 2021, 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 that insiders are buying.
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