These Analysts Just Made A Massive Downgrade To Their Armstrong Flooring, Inc. (NYSE:AFI) EPS Forecasts
Today is shaping up negative for Armstrong Flooring, Inc. (NYSE:AFI) 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.
After the downgrade, the consensus from Armstrong Flooring's twin analysts is for revenues of US$536m in 2020, which would reflect a not inconsiderable 14% decline in sales compared to the last year of performance. The loss per share is expected to ameliorate slightly, reducing to US$2.68. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$618m and losses of US$1.78 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.
See our latest analysis for Armstrong Flooring
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 14% revenue decline is roughly in line with the historical trend, which saw revenues shrink -17% annually over the past five years Compare this with our data on other companies (with analyst coverage) in the industry, which in aggregate are forecast to see their revenue grow 3.2% next year. It seems clear that while the revenue forecasts are all negative, Armstrong Flooring's revenue decline is expected to be less severe than that of the industry itself.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Armstrong Flooring. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Armstrong Flooring's revenues are expected to grow slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Armstrong Flooring, and a few readers might choose to steer clear of the stock.
There might be good reason for analyst bearishness towards Armstrong Flooring, like a short cash runway. Learn more, and discover the 3 other risks we've identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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