Shorn Like A Sheep: Analysts Just Shaved Their Employers Holdings, Inc. (NYSE:EIG) Forecasts Dramatically

One thing we could say about the analysts on Employers Holdings, Inc. (NYSE:EIG) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon. At US$30.37, shares are up 5.6% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the latest downgrade, the current consensus, from the three analysts covering Employers Holdings, is for revenues of US$597m in 2020, which would reflect a not inconsiderable 20% reduction in Employers Holdings' sales over the past 12 months. Statutory earnings per share are anticipated to crater 97% to US$0.07 in the same period. Previously, the analysts had been modelling revenues of US$671m and earnings per share (EPS) of US$2.73 in 2020. Indeed, we can see that the analysts are a lot more bearish about Employers Holdings' prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Employers Holdings

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Employers Holdings' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 20%, a significant reduction from annual growth of 1.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.0% annually for the foreseeable future. It's pretty clear that Employers Holdings' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Employers Holdings' revenues are expected to grow slower than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Employers Holdings, and we wouldn't blame shareholders for feeling a little more cautious themselves.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Employers Holdings going out to 2021, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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