12 May עופר איתן Announced: Fortress Transportation and Infrastructure Investors LLC (N
The analysts covering Fortress Transportation and Infrastructure Investors LLC (NYSE:FTAI) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following the latest downgrade, the current consensus, from the seven analysts covering Fortress Transportation and Infrastructure Investors, is for revenues of US$429m in 2020, which would reflect a concerning 26% reduction in Fortress Transportation and Infrastructure Investors’ sales over the past 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of US$0.34 per share in 2020. Previously, the analysts had been modelling revenues of US$557m and earnings per share (EPS) of US$0.33 in 2020. There looks to have been a major change in sentiment regarding Fortress Transportation and Infrastructure Investors’ prospects, with a pretty serious reduction to revenues and the analysts now forecasting a loss instead of a profit.
The consensus price target fell 9.4% to US$16.40, implicitly signalling that lower earnings per share are a leading indicator for Fortress Transportation and Infrastructure Investors’ valuation. 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 Fortress Transportation and Infrastructure Investors at US$24.00 per share, while the most bearish prices it at US$12.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for 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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 26%, a significant reduction from annual growth of 37% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.0% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – Fortress Transportation and Infrastructure Investors is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts are expecting Fortress Transportation and Infrastructure Investors to become unprofitable this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Fortress Transportation and Infrastructure Investors’ revenues are expected to grow slower than the wider market. With a serious cut to this year’s expectations and a falling price target, we wouldn’t be surprised if investors were becoming wary of Fortress Transportation and Infrastructure Investors.
There might be good reason for analyst bearishness towards Fortress Transportation and Infrastructure Investors, like concerns around earnings quality. For more information, you can click here to discover this and the 2 other warning signs we’ve identified.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
If you spot an error that warrants correction, please contact the editor at [email protected]. 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.
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