Shareholders of International Seaways, Inc. (NYSE:INSW) will be pleased this week, given that the stock price is up 16% to US$20.45 following its latest first-quarter results. Revenues of US$45m came in 5.3% below estimates, but statutory losses were well contained with a per-share loss of US$0.48 being some 16% smaller than what the analysts were predicting. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for International Seaways

After the latest results, the consensus from International Seaways' four analysts is for revenues of US$189.4m in 2021, which would reflect a concerning 55% decline in sales compared to the last year of performance. Losses are forecast to balloon 596% to US$1.36 per share. Before this latest report, the consensus had been expecting revenues of US$239.5m and US$0.043 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

The average price target was broadly unchanged at US$26.67, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on International Seaways, with the most bullish analyst valuing it at US$35.00 and the most bearish at US$18.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One more thing stood out to us about these estimates, and it's the idea that International Seaways' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 66% to the end of 2021. This tops off a historical decline of 0.7% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 4.2% annually. So while a broad number of companies are forecast to grow, unfortunately International Seaways is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at International Seaways. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$26.67, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on International Seaways. Long-term earnings power is much more important than next year's profits. We have forecasts for International Seaways going out to 2023, and you can see them free on our platform here.

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

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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