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Results: Nordic American Tankers Limited Delivered A Surprise Loss And Now Analysts Have New Forecasts

Last week, you might have seen that Nordic American Tankers Limited (NYSE:NAT) released its full-year result to the market. The early response was not positive, with shares down 5.4% to US$3.33 in the past week. Revenues fell 7.8% short of expectations, at US$175m. Earnings correspondingly dipped, with Nordic American Tankers reporting a statutory loss of US$0.07 per share, whereas analysts had previously modelled a profit in this period. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.

Check out our latest analysis for Nordic American Tankers

NYSE:NAT Past and Future Earnings, February 20th 2020
NYSE:NAT Past and Future Earnings, February 20th 2020

Taking into account the latest results, the most recent consensus for Nordic American Tankers from six analysts is for revenues of US$295.2m in 2020, which is a major 68% increase on its sales over the past 12 months. Nordic American Tankers is also expected to turn profitable, with statutory earnings of US$0.73 per share. In the lead-up to this report, analysts had been modelling revenues of US$297.7m and earnings per share (EPS) of US$0.98 in 2020. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.

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The consensus price target held steady at US$6.00, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Nordic American Tankers at US$8.00 per share, while the most bearish prices it at US$4.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. One thing stands out from these estimates, which is that analysts are forecasting Nordic American Tankers to grow faster in the future than it has in the past, with revenues expected to grow 68%. If achieved, this would be a much better result than the 11% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the market are forecast to see their revenue grow 4.5% per year. Although Nordic American Tankers's revenues are expected to improve, it seems that analysts are also expecting it to grow faster than the wider market.

The Bottom Line

The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for Nordic American Tankers going out to 2021, and you can see them free on our platform here.

You can also see whether Nordic American Tankers is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.