Shareholders might have noticed that American Shipping Company ASA (OB:AMSC) filed its yearly result this time last week. The early response was not positive, with shares down 7.3% to kr29.90 in the past week. Revenues were US$88m, approximately in line with whatthe analyst expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.30, an impressive 493% ahead of estimates. This is an important time for investors, as they can track a company’s performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.
Taking into account the latest results, American Shipping’s sole analyst currently expect revenues in 2021 to be US$89.0m, approximately in line with the last 12 months. Per-share earnings are expected to increase 6.7% to US$0.32. Before this earnings report, the analyst had been forecasting revenues of US$89.0m and earnings per share (EPS) of US$0.32 in 2021. So it’s pretty clear that, although the analyst has updated their estimates, there’s been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$4.72.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It’s clear from the latest estimates that American Shipping’s rate of growth is expected to accelerate meaningfully, with the forecast 0.9% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 0.03% 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 13% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, American Shipping is expected to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with the analyst reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$4.72, with the latest estimates not enough to have an impact on their price target.
With that in mind, we wouldn’t be too quick to come to a conclusion on American Shipping. Long-term earnings power is much more important than next year’s profits. We have analyst estimates for American Shipping going out as far as 2023, and you can see them free on our platform here.
You should always think about risks though. Case in point, we’ve spotted 2 warning signs for American Shipping you should be aware of.
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