It's been a mediocre week for Flex LNG Ltd. (OB:FLNG) shareholders, with the stock dropping 16% to kr59.50 in the week since its latest yearly results. It was an okay report, and revenues came in at US$120m, approximately in line with analyst estimates leading up to the results announcement. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Flex LNG

Taking into account the latest results, the current consensus from Flex LNG's five analysts is for revenues of US$196.5m in 2020, which would reflect a sizeable 64% increase on its sales over the past 12 months. Statutory earnings per share are expected to shoot up 203% to US$0.94. Yet prior to the latest earnings, analysts had been forecasting revenues of US$227.6m and earnings per share (EPS) of US$1.61 in 2020. It looks like analyst sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a large cut to consensus earnings per share numbers as well.

The consensus price target fell 5.8% to US$14.93, with the weaker earnings outlook clearly leading analyst valuation estimates. 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 Flex LNG at US$22.87 per share, while the most bearish prices it at US$11.52. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Further, we can compare these estimates to past performance, and see how Flex LNG forecasts compare to the wider market's forecast performance. Next year brings more of the same, according to analysts, with revenue forecast to grow 64%, in line with its 77% annual growth over the past three years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 5.8% next year. So although Flex LNG is expected to maintain its revenue growth rate, it's definitely expected 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. Unfortunately analysts also downgraded their revenue estimates, although industry data suggests that Flex LNG's revenues are expected to grow faster than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Flex LNG's future valuation.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Flex LNG going out to 2022, and you can see them free on our platform here..

It might also be worth considering whether Flex LNG's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.