Yahoo Finance Global Ship Lease, Inc. Just Missed EPS By 5.1%: Here's What Analysts Think Will Happen Next
It's been a sad week for Global Ship Lease, Inc. (NYSE:GSL), who've watched their investment drop 12% to US$5.18 in the week since the company reported its yearly result. It looks like the results were a bit of a negative overall. While revenues of US$261m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.1% to hit US$1.48 per share. Following the result, 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Global Ship Lease
Taking into account the latest results, the latest consensus from Global Ship Lease's one analyst is for revenues of US$295.3m in 2020, which would reflect a notable 13% improvement in sales compared to the last 12 months. Global Ship Lease is also expected to turn profitable, with statutory earnings of US$1.71 per share. In the lead-up to this report, analysts had been modelling revenues of US$282.5m and earnings per share (EPS) of US$2.02 in 2020. While next year's revenue estimates increased, there was also a substantial drop in EPS expectations, suggesting the consensus has a bit of a mixed view of these results.
There's been no major changes to an analyst price target of US$13.50, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation.
Further, we can compare these estimates to past performance, and see how Global Ship Lease forecasts compare to the wider market's forecast performance. Analysts are definitely expecting Global Ship Lease's growth to accelerate, with the forecast 13% growth ranking favourably alongside historical growth of 7.7% per annum 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 3.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Global Ship Lease is expected to grow much faster than its market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Global Ship Lease. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Global Ship Lease. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Global Ship Lease going out as far as 2021, and you can see them free on our platform here.
You can also view our analysis of Global Ship Lease's balance sheet, and whether we think Global Ship Lease is carrying too much debt, for free on our platform here.
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