Safe Bulkers, Inc. Just Recorded A 38% EPS Beat: Here's What Analysts Are Forecasting Next
A week ago, Safe Bulkers, Inc. (NYSE:SB) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. The company beat both earnings and revenue forecasts, with revenue of US$65m, some 5.7% above estimates, and statutory earnings per share (EPS) coming in at US$0.18, 38% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Safe Bulkers after the latest results.
See our latest analysis for Safe Bulkers
After the latest results, the three analysts covering Safe Bulkers are now predicting revenues of US$269.8m in 2021. If met, this would reflect a huge 26% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to surge 990% to US$0.67. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$258.7m and earnings per share (EPS) of US$0.48 in 2021. So it seems there's been a definite increase in optimism about Safe Bulkers' future following the latest results, with a considerable lift to the earnings per share forecasts in particular.
It will come as no surprise to learn that the analysts have increased their price target for Safe Bulkers 12% to US$3.05on the back of these upgrades. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Safe Bulkers at US$4.30 per share, while the most bearish prices it at US$0.90. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Safe Bulkers' rate of growth is expected to accelerate meaningfully, with the forecast 35% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 14% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Safe Bulkers is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Safe Bulkers' earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Safe Bulkers going out to 2023, and you can see them free on our platform here..
Before you take the next step you should know about the 4 warning signs for Safe Bulkers (1 can't be ignored!) that we have uncovered.
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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